Ralliant Corp 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Ralliant Corporation Opinion on the Financial Statements We have audited the accompanying consolidated and combined balance sheets of Ralliant Corporation and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated and combined statements of (loss) earnings, comprehensive (loss) income, changes in equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated and combined financial statements”). In our opinion, the consolidated and combined financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated and combined financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 65 Description of the Matter Goodwill impairment test for the Test and Measurement reporting unit At December 31, 2025, the Company’s goodwill was $1.7 billion and the goodwill attributed to the Test and Measurement reporting unit was $901.3 million. As discussed in Note 5 of the consolidated and combined financial statements, goodwill is tested for impairment at least annually at the reporting unit level. The Company performed its annual goodwill impairment test in the fourth quarter of 2025 and used both a discounted cash flow model and a guideline public company approach in its assessment of the Test and Measurement reporting unit. The results of the goodwill impairment test indicated that the carrying value of the Test and Measurement reporting unit exceeded its fair value, and the Company recorded a partial goodwill impairment charge of $1.4 billion related to the Test and Measurement reporting unit. Auditing management’s annual goodwill impairment test for the Test and Measurement reporting unit was complex due to significant estimation required in determining the fair value of the reporting unit. In particular, the fair value estimate was sensitive to significant assumptions such as the projected revenues, projected profitability margins, long-term growth rate, and the discount rate, which are affected by expectations about future market or economic conditions and the economic performance of the Test and Measurement reporting unit. How We Addressed the Matter in Our Audit To test the estimated fair value of the Test and Measurement reporting unit used in the annual goodwill impairment test, we performed audit procedures that included, among others, assessing the methodologies used to determine the fair value of the Test and Measurement reporting unit, and testing the significant assumptions discussed above. We compared the significant assumptions used by management to historical results and current industry and economic trends. We also evaluated any identified contrary evidence, assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions. In addition, we involved our internal valuation specialists to assist in the evaluation and testing of the significant valuation assumptions discussed above. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2024. Raleigh, North Carolina February 26, 2026 66 RALLIANT CORPORATION AND SUBSIDIARIES CONSOLIDATED AND COMBINED BALANCE SHEETS ($ in millions, except per share amounts) As of December 31, 2025 2024 ASSETS Current assets: Cash and equivalents $ 318.8 $ — Accounts receivable less allowance for credit losses of $ 7.8 and $ 11.3 , respectively 285.3 293.8 Inventories: Finished goods 63.5 72.1 Work in process 119.5 90.1 Raw materials 118.6 120.7 Inventories, net 301.6 282.9 Prepaid expenses 56.7 40.8 Other current assets 13.7 1.1 Total current assets 976.1 618.6 Property, plant, and equipment, net 214.2 200.2 Other assets 163.7 151.0 Goodwill 1,672.4 2,940.0 Other intangible assets, net 795.2 809.6 Total assets $ 3,821.6 $ 4,719.4 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 530.4 $ — Trade accounts payable 263.7 254.6 Accrued expenses and other current liabilities 365.6 279.1 Total current liabilities 1,159.7 533.7 Long-term debt 618.4 — Other long-term liabilities 409.2 422.9 Total liabilities 2,187.3 956.6 Commitments and contingencies (Note 14) Equity: Common stock: $ 0.01 par value, as of December 31, 2025 and December 31, 2024, 1,300 million and 1,000 shares authorized, respectively; and 112.9 million and 100 shares issued and outstanding, respectively 1.1 — Preferred stock: $ 0.01 par value, 10.0 million shares authorized; no shares issued and outstanding — — Additional paid-in capital 3,223.4 — Accumulated deficit ( 1,345.3 ) — Accumulated other comprehensive loss ( 244.9 ) ( 491.3 ) Net Former Parent investment — 4,254.1 Total equity 1,634.3 3,762.8 Total liabilities and equity $ 3,821.6 $ 4,719.4 See the accompanying Notes to the consolidated and combined financial statements. 67 RALLIANT CORPORATION AND SUBSIDIARIES CONSOLIDATED AND COMBINED STATEMENTS OF (LOSS) EARNINGS ($ and shares in millions, except per share amounts) Year Ended December 31, 2025 2024 2023 Sales $ 2,068.8 $ 2,154.7 $ 2,155.7 Cost of sales ( 1,028.5 ) ( 1,042.6 ) ( 1,036.0 ) Gross profit 1,040.3 1,112.1 1,119.7 Operating costs: Selling, general, and administrative ( 616.6 ) ( 552.1 ) ( 446.4 ) Research and development ( 165.0 ) ( 163.5 ) ( 161.5 ) Gain on sale of property — 63.1 — Goodwill impairment ( 1,441.7 ) — — Operating (loss) profit ( 1,183.0 ) 459.6 511.8 Non-operating expense, net: Interest expense, net ( 32.3 ) — — Loss from divestiture — ( 25.6 ) — Other non-operating expenses, net ( 1.1 ) ( 1.4 ) ( 2.0 ) (Loss) earnings before income taxes ( 1,216.4 ) 432.6 509.8 Income tax expense ( 6.1 ) ( 78.0 ) ( 93.0 ) Net (loss) earnings $ ( 1,222.5 ) $ 354.6 $ 416.8 Net (loss) earnings per share: Basic $ ( 10.84 ) $ 3.15 $ 3.70 Diluted $ ( 10.84 ) $ 3.15 $ 3.70 Average common stock and common equivalent shares outstanding: Basic 112.8 112.7 112.7 Diluted 112.8 112.7 112.7 See the accompanying Notes to the consolidated and combined financial statements. 68 RALLIANT CORPORATION AND SUBSIDIARIES CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME ($ in millions) Year Ended December 31, 2025 2024 2023 Net (loss) earnings $ ( 1,222.5 ) $ 354.6 $ 416.8 Other comprehensive income (loss), net of income taxes: Foreign currency translation adjustments 244.7 ( 136.1 ) ( 5.5 ) Pension and post-retirement plan benefit adjustments 1.7 ( 2.0 ) ( 2.5 ) Total other comprehensive income (loss), net of income taxes 246.4 ( 138.1 ) ( 8.0 ) Comprehensive (loss) income $ ( 976.1 ) $ 216.5 $ 408.8 See the accompanying Notes to the consolidated and combined financial statements. 69 RALLIANT CORPORATION AND SUBSIDIARIES CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN EQUITY ($ and shares in millions) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Net Former Parent Investment Total Equity Shares Outstanding Amount Balance, December 31, 2022 — $ — $ — $ — $ ( 345.2 ) $ 2,603.8 $ 2,258.6 Net earnings for the period — — — — — 416.8 416.8 Net transfers to Former Parent — — — — — ( 431.7 ) ( 431.7 ) Other comprehensive loss — — — — ( 8.0 ) — ( 8.0 ) Stock-based compensation — — — — — 25.0 25.0 Balance, December 31, 2023 — — — — ( 353.2 ) 2,613.9 2,260.7 Net earnings for the period — — — — — 354.6 354.6 Net transfers from Former Parent — — — — — 1,261.1 1,261.1 Other comprehensive loss — — — — ( 138.1 ) — ( 138.1 ) Stock-based compensation — — — — — 24.5 24.5 Balance, December 31, 2024 — — — — ( 491.3 ) 4,254.1 3,762.8 Net loss (income) for the period — — — ( 1,334.0 ) 111.5 ( 1,222.5 ) Recapitalization 112.7 1.1 — — — ( 1.1 ) — Consideration paid to Former Parent in connection with the Separation — — — — — ( 1,150.0 ) ( 1,150.0 ) Noncash adjustments to Former Parent's investment, net — — 3,269.5 — — ( 3,276.3 ) ( 6.8 ) Net transfers to Former Parent — — ( 90.2 ) — — 47.2 ( 43.0 ) Other comprehensive income — — — — 246.4 — 246.4 Dividends to common stockholders ($ 0.10 per common share) — — — ( 11.3 ) — ( 11.3 ) Stock-based compensation 0.2 — 44.8 — — 14.6 59.4 Shares withheld for taxes — — ( 0.7 ) — — — ( 0.7 ) Balance, December 31, 2025 112.9 $ 1.1 $ 3,223.4 $ ( 1,345.3 ) $ ( 244.9 ) $ — $ 1,634.3 See the accompanying Notes to the consolidated and combined financial statements. 70 RALLIANT CORPORATION AND SUBSIDIARIES CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS ($ in millions) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net (loss) earnings $ ( 1,222.5 ) $ 354.6 $ 416.8 Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: Goodwill impairment 1,441.7 — — Amortization 86.9 84.0 3.6 Depreciation 28.6 29.0 27.1 Stock-based compensation 56.2 24.5 25.0 Gain on sale of property — ( 63.1 ) — Loss from divestiture — 25.6 — Change in deferred income taxes ( 62.7 ) ( 23.1 ) ( 15.1 ) Change in accounts receivable, net 15.2 8.7 9.3 Change in inventories ( 13.0 ) 16.7 ( 10.3 ) Change in trade accounts payable 3.6 22.8 ( 18.1 ) Change in prepaid expenses and other assets ( 30.1 ) 11.9 ( 20.1 ) Change in accrued expenses and other liabilities 93.7 ( 37.1 ) 43.6 Net cash provided by operating activities 397.6 454.5 461.8 Cash flows from investing activities: Purchases of property, plant and equipment ( 39.2 ) ( 34.3 ) ( 29.2 ) Proceeds from sale of property 1.5 60.2 6.8 Cash paid for acquisitions, net of cash received — ( 1,718.2 ) — Cash infusion into divestiture — ( 14.0 ) — All other investing activities — ( 1.0 ) — Net cash used in investing activities ( 37.7 ) ( 1,707.3 ) ( 22.4 ) Cash flows from financing activities: Net proceeds from borrowings 1,146.8 — — Consideration paid to Former Parent in connection with separation ( 1,150.0 ) — — Net transfers (to) from Former Parent ( 43.0 ) 1,261.1 ( 431.7 ) Dividends paid ( 11.3 ) — — All other financing activities 2.8 — — Net cash (used in) provided by financing activities ( 54.7 ) 1,261.1 ( 431.7 ) Effect of exchange rate changes on cash and equivalents 13.6 ( 8.3 ) ( 7.7 ) Net change in cash and equivalents 318.8 — — Beginning balance of cash and equivalents — — — Ending balance of cash and equivalents $ 318.8 $ — $ — See the accompanying Notes to the consolidated and combined financial statements. 71 RALLIANT CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS ($ and shares in millions, except per share amounts, unless otherwise noted) NOTE 1. BUSINESS OVERVIEW AND BASIS FOR PRESENTATION Ralliant Corporation (“Ralliant,” the “Company,” or “it”) is a global technology company with businesses that design, develop, manufacture, and service precision instruments and highly engineered products. The Company empowers engineers with precision technologies essential for breakthrough innovation in an electrified and digital world, enabling its customers to bring advanced technologies to market faster and more efficiently. Its strategic segments – Test and Measurement and Sensors and Safety Systems – include well-known brands with prominent positions across a range of attractive end markets. On May 27, 2025, the Board of Directors of Fortive Corporation (“Fortive” or the “Former Parent”) approved the separation of Fortive’s Precision Technologies (“PT”) operating segment through the pro rata distribution of all of the issued and outstanding common stock of Ralliant to Fortive's stockholders (the “Separation”). Ralliant’s Registration Statement on Form 10, as amended, was declared effective by the SEC on May 30, 2025. In connection with the Separation, on June 27, 2025, the net assets of the Ralliant businesses were contributed to Ralliant, a wholly-owned subsidiary of the Former Parent, and, as partial consideration for such contribution, Ralliant made a cash payment to Fortive in the amount of $ 1.15 billion. In addition, on June 27, 2025, the 100 shares of Ralliant common stock held by Fortive were recapitalized into 112,730,036 shares of Ralliant common stock. All per share amounts in the Consolidated and Combined Statements of (Loss) Earnings have been retroactively adjusted to give effect to this recapitalization. On June 28, 2025, the first day of the Company’s third fiscal quarter, Ralliant completed the Separation. The Separation was completed on such date in the form of a pro rata distribution to Fortive shareholders of record as of the close of business on June 16, 2025 (the “Record Date”) of all of the issued and outstanding shares of Ralliant common stock held by Fortive. Each Fortive shareholder as of the Record Date received one share of Ralliant common stock for every three shares of Fortive common stock held on the Record Date. Ralliant’s common stock began “regular way” trading on the New York Stock Exchange under the ticker symbol “RAL” on June 30, 2025. Basis of Presentation Ralliant has historically operated as part of Fortive and not as a separate, publicly-traded company. For the periods prior to the Separation, the combined financial statements have been derived from Fortive’s historical accounting records of its PT segment and are presented on a carve-out basis. All revenues and costs as well as assets and liabilities directly associated with the business activity of Ralliant are included as a component of the consolidated and combined financial statements. The financial statements also include allocations of certain general, administrative, sales, and marketing expenses from Fortive’s corporate office and from other Fortive businesses to Ralliant, and allocations of related assets, liabilities, and Net Former Parent investment, as applicable. The allocations have been determined on a reasonable basis; however, the amounts are not necessarily representative of the amounts that would have been reflected in the financial statements had Ralliant been an entity that operated independently of Fortive. Related-party allocations are discussed further in Note 18. Following the Separation, the consolidated and combined financial statements included the accounts of Ralliant and its wholly-owned subsidiaries. Accordingly: • The Consolidated Balance Sheet at December 31, 2025 consisted of Ralliant’s consolidated balances, while the Combined Balance Sheet at December 31, 2024 consisted of the combined balances of the Ralliant businesses. • The Consolidated and Combined Statements of (Loss) Earnings and Statements of Comprehensive (Loss) Income for the year ended December 31, 2025 consisted of Ralliant’s consolidated results for the six months ended December 31, 2025 and the combined results of Ralliant’s businesses for the six months ended June 27, 2025. The Combined Statements of (Loss) Earnings and Statements of Comprehensive (Loss) Income for the years ended December 31, 2024 and 2023 consisted of the combined results of the Ralliant businesses. 72 • The Consolidated and Combined Statements of Equity for the year ended December 31, 2025 consisted of Ralliant’s consolidated activity for the six months ended December 31, 2025 and the combined results of Ralliant’s businesses for the six months ended June 27, 2025. The Combined Statements of Equity for the years ended December 31, 2024 and 2023 consisted of the combined activity of the Ralliant businesses. • The Consolidated and Combined Statements of Cash Flows for the year ended December 31, 2025 consisted of Ralliant’s consolidated results for the six months ended December 31, 2025 and the combined results of Ralliant’s businesses for the six months ended June 27, 2025. The Combined Statements of Cash Flows for the years ended December 31, 2024 and 2023 consisted of the combined results of the Ralliant businesses. Prior to the Separation, Ralliant was dependent upon Fortive for all of its working capital and financing requirements under Fortive’s centralized approach to cash management and financing of its operations. Because the Company was part of Fortive during the six months ended June 27, 2025, only cash, cash equivalents, and borrowings clearly associated with Ralliant and related to the Separation have been included in these consolidated and combined financial statements. Other financial transactions relating to the business operations of the Company during the six months ended June 27, 2025 were accounted for through the Net Former Parent investment account of the Company. Net Former Parent investment, which includes retained earnings prior to the Separation, represents Fortive’s interest in the recorded net assets of Ralliant. All significant transactions between Ralliant and Fortive have been included in the accompanying consolidated and combined financial statements for the years ended December 31, 2025, 2024, and 2023. Transactions with Fortive are reflected in the accompanying Consolidated and Combined Statements of Changes in Equity as “Net transfers (to) from Former Parent” and in the accompanying Consolidated and Combined Balance Sheets within “Net Former Parent investment.” All significant intercompany accounts and transactions between the operations comprising Ralliant have been eliminated in the accompanying Consolidated and Combined Statements of (Loss) Earnings for the years ended December 31, 2025, 2024, and 2023 and the Consolidated and Combined Balance Sheets as of December 31, 2025 and December 31, 2024. The accompanying consolidated and combined financial statements present the Company’s historical financial position, results of operations, changes in equity, and cash flows in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and are audited. In the opinion of management, these statements include all adjustments, consisting only of normal, recurring adjustments, necessary for a fair statement of the financial position of the Company. The consolidated and combined financial statements include the Company’s accounts and the accounts of its subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. The Company reclassified sales by geography in the fourth quarter of 2025 to better align sales to the end customer, further disaggregate property, plant, and equipment by category, and separated the presentation of Prepaid expenses from Other current assets on the Consolidated and Combined Balance Sheet. Prior year information has been recast to conform to current year presentation. Such change to the Company’s reporting process is not material to the Company’s consolidated and combined financial statements. Segment Presentation Ralliant operates through two reportable segments that are also its two operating segments (i) Test and Measurement and (ii) Sensors and Safety Systems, which are further described below. The Company’s Test and Measurement segment provides precision test and measurement instruments, systems, software, and services. Through its portfolio of industry leading solutions, including oscilloscopes, probes, source measuring units, semiconductor test systems, high-power bi-directional power supplies, and measurement analysis software packages, the Test and Measurement segment empowers scientists, engineers, and technicians to create and realize technological advances with ever greater efficiency, speed, and accuracy. 73 The Company’s Sensors and Safety Systems segment provides leading power grid monitoring solutions, safety systems for mission critical defense and space applications, and sensing solutions for critical environments where uptime, precision, and reliability are essential. The Sensors and Safety Systems segment provides advanced monitoring, protection, and diagnostic solutions for high-voltage electrical assets in power generation, transmission, and distribution. The segment’s energetic materials, ignition safety systems, and precision pyrotechnic devices are used in mission-critical applications such as satellite deployment, rocket propulsion initiation, aerial vehicle safety systems, and military defense systems. The Sensors and Safety Systems segment also provides premium sensing products encompassing liquid level, flow, and pressure sensors, motion sensors and components, and hygienic sensors. Segment Realignment and Divestiture In June 2024, Invetech, excluding the Dover Motion Business, was divested to Invetech’s management team (the “Invetech Divestiture”). Refer to Note 3 to the consolidated and combined financial statements included in this Annual Report for more information on the Invetech Divestiture. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates —The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets (including goodwill and other indefinite-lived intangible assets), liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Ralliant bases these estimates on historical experience, the current economic environment, and on various other assumptions that are believed to be reasonable under the circumstances. However, uncertainties associated with these estimates exist and actual results may differ from these estimates. Cash and Equivalents —The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Accounts Receivable and Allowances for Credit Losses —The Company measures its allowance to reflect expected credit losses over the remaining contractual life of the asset. Expected credit losses for the pooled assets are estimated based on historical loss experience, credit quality, the durations of outstanding account receivables, and expectations of the future economic environment. Expected credit losses of the assets originating during the year and changes to expected losses in the same period are recognized in earnings. All trade accounts and unbilled receivables are recorded within the Consolidated and Combined Balance Sheet, adjusted for any write-offs, and net of allowances for credit losses. The Company regularly performs detailed reviews of the Company’s portfolios to evaluate the collectability of receivables based on a combination of past, current, and future financial and qualitative factors that may affect customers’ ability to pay. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations, a specific reserve is recorded against amounts due to reduce the recognized receivable to the amount reasonably expected to be collected. Amounts determined to be uncollectible are charged directly against the allowances, while amounts recovered on previously written-off accounts increase the allowances. Ralliant does not believe that accounts receivable represent significant concentrations of credit risk because of the diversified portfolio of individual customers and geographical areas. During the years ended December 31, 2025, 2024, and 2023, the allowance for credit losses, write-off activity, and recoveries were immaterial. Inventory Valuation —Inventories include the costs of material, labor, and overhead. Substantially all inventories are stated at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method or the average-weighted cost method. 74 Property, Plant, and Equipment —Property, plant, and equipment are carried at cost. The provision for depreciation has been computed principally by the straight-line method based on the estimated useful lives of the depreciable assets as follows: Category Useful Life Buildings 30 years Leased assets and leasehold improvements Amortized over the lesser of the economic life of the asset or the term of the lease Machinery, equipment and other 3 – 10 years Estimated useful lives are periodically reviewed and, when appropriate, changes to estimates are made prospectively. Fair Value of Financial Instruments —Ralliant’s financial instruments consist primarily of accounts receivable, nonqualified deferred compensation plans, and obligations under trade accounts payable. Due to their short-term nature, the carrying values for accounts receivable and trade accounts payable approximate fair value. Refer to Note 6 to the consolidated and combined financial statements included in this Annual Report for additional information regarding the fair value of financial instruments. Goodwill and Other Intangible Assets —Goodwill and other intangible assets result from Ralliant’s business acquisitions. In accordance with accounting standards related to business combinations, goodwill and other indefinite-lived intangible assets are not amortized; however, certain finite-lived identifiable intangible assets, primarily customer relationships and acquired technology, are amortized over their estimated useful lives. The Company reviews identified intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company also tests goodwill and other intangible assets with indefinite lives at least annually for impairment. Refer to Note 5 to the consolidated and combined financial statements included in this Annual Report for additional information about the Company’s goodwill and other intangible assets. Revenue Recognition —Ralliant derives revenue primarily from the sale of products, with additional revenue from the sale of services. Revenue is recognized when control of promised products or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. Product sales include revenue from the sale of products and equipment. Service sales include revenues from extended warranties, maintenance contracts or services, and services related to previously sold products. For revenue related to a product or service to qualify for recognition, Ralliant must have an enforceable contract with a customer that defines the goods or services to be transferred and the payment terms related to those goods or services. Further, collection of substantially all consideration for the goods or services transferred must be probable based on the customer’s intent and ability to pay the promised consideration. Ralliant applies judgment in determining the customer’s ability and intention to pay, which is based on a combination of financial and qualitative factors, including the customer’s financial condition, collateral, debt-servicing ability, past payment experience, and credit bureau information. Customer allowances and rebates, consisting primarily of volume discounts and other short-term incentive programs, are considered in determining the transaction price for the contract. These allowances and rebates are reflected as a reduction in the contract transaction price. Judgment is exercised in determining product returns, customer allowances, and rebates, and are estimated based on historical experience and known trends. 75 Most of Ralliant’s sales contracts contain standard terms and conditions. Ralliant evaluates contracts to identify distinct goods and services promised in the contract (performance obligations). Sometimes this evaluation involves judgment to determine whether the goods or services are highly dependent on or highly interrelated with one another, or whether such goods or services significantly modify or customize one another. Certain customer arrangements include multiple performance obligations, typically hardware, installation, training, consulting, and other services. Generally, these elements are delivered within the same reporting period, except services. Ralliant allocates the contract transaction price to each performance obligation on a relative standalone selling price basis. Ralliant estimates standalone selling price using the observable price that the good or service sells for separately in similar circumstances and to similar customers or, if observable price is not available, other methods. Allocating the transaction price to each performance obligation sometimes requires judgment. Revenue from sales of hardware is recognized when control transfers to the customer, which is generally when the product is shipped. If any significant obligation to the customer with respect to a sales transaction remains to be fulfilled following shipment (typically installation, other services noted above, or acceptance by the customer), revenue recognition is deferred until such obligations have been fulfilled. Further, revenue related to separately priced extended warranty and product maintenance agreements is deferred when appropriate and recognized as revenue over the term of the agreement. Shipping and Handling —Shipping and handling costs are included as a component of Cost of sales in the Consolidated and Combined Statements of (Loss) Earnings. Revenue derived from shipping and handling costs billed to customers is included in Sales of products in the Consolidated and Combined Statements of (Loss) Earnings. Advertising —Advertising costs are expensed as incurred. Research and Development —Ralliant conducts research and development activities for the purpose of developing new products, enhancing the functionality, effectiveness, ease of use, and reliability of the Company’s existing products, and expanding the applications for which uses of Ralliant’s products are appropriate. Research and development costs are expensed as incurred. Restructuring —Ralliant periodically initiates restructuring activities to appropriately position Ralliant’s cost base relative to prevailing economic conditions and associated customer demand, as well as in connection with certain acquisitions. Costs associated with restructuring actions can include one-time termination benefits and related charges, in addition to facility closure, contract termination, and other related activities. Ralliant records the cost of the restructuring activities when the associated liability is incurred. In the third quarter of 2025, the Company announced a Cost Savings program, which is expected to be completed by December 31, 2026. The nature of the activities is focused on spin-related dis-synergies within the Test & Measurement segment. In the fourth quarter of 2024, Ralliant initiated a discrete restructuring plan that was completed as of December 31, 2025. The nature of the activities in the plan was related to the Separation and consisted primarily of targeted workforce reductions to realign the cost structure. In the first quarter of 2023, Ralliant initiated a discrete restructuring plan that was completed by the end of 2023. The nature of the activities in 2023 consisted primarily of targeted workforce reductions in response to overall macroeconomic and other external conditions. Ralliant incurred these costs to position itself to provide superior products and services to customers in a cost-efficient manner, while taking into consideration the impact of broad economic uncertainties. Ralliant incurred restructuring charges of $ 13.1 million, $ 8.5 million, and $ 20.4 million during the years ended December 31, 2025, 2024 and 2023, respectively. These charges are recorded within Cost of sales and Selling, general, and administrative expenses in the Consolidated and Combined Statements of (Loss) Earnings. Accrued restructuring costs were $ 10.4 million, $ 5.9 million, and $ 13.5 million as of December 31, 2025, 2024 and 2023, respectively, and are recorded within Accrued expenses and other current liabilities in the Consolidated and Combined Balance Sheets. 76 Foreign Currency Transaction and Translation —Exchange rate adjustments resulting from foreign currency transactions are recognized in Net (loss) earnings. Net foreign currency transaction losses were not material in any of the years presented. Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. dollars are translated into U.S. dollars using year-end exchange rates and income statement accounts are translated at weighted-average exchange rates. These foreign currency translation impacts are reflected as a component of Accumulated other comprehensive loss (“AOCI”) within Consolidated and Combined Balance Sheets. Accounting for Stock-Based Compensation —Ralliant accounts for stock-based compensation by measuring the cost of employee services received in exchange for all equity awards granted, including stock options, restricted stock units (“RSUs”) and performance-based stock units (“PSUs”), based on the fair value of the award as of the grant date. Equity-based compensation expense is recognized net of an estimated forfeiture rate over the requisite service period. Generally, equity awards are subject to graded vesting and compensation expense is recognized separately over each vesting tranche of the award, resulting in an accelerated expense recognition pattern. Refer to Note 15 to the consolidated and combined financial statements included in this Annual Report for additional information. Income Taxes —In accordance with GAAP, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted rates expected to be in effect during the year in which the differences reverse. Deferred tax assets generally represent items that can be used as a tax deduction or credit in the Company’s tax return in future years for which the tax benefit has already been reflected in the accompanying Consolidated and Combined Statements of (Loss) Earnings. Deferred tax liabilities generally represent items that have already been taken as a deduction on the Company’s tax return but have not yet been recognized as an expense in the accompanying Consolidated and Combined Statements of (Loss) Earnings. The effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income tax expense in the period that includes the enactment date. Ralliant’s deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not (a likelihood of more than 50 percent) that some portion or all of the deferred tax assets will not be realized. Ralliant evaluates the realizability of deferred income tax assets for each of the jurisdictions in which it operates. If Ralliant experiences cumulative pretax income in a particular jurisdiction in the three-year period including the current and prior two years, Ralliant normally concludes that the deferred income tax assets will more likely than not be realizable and no valuation allowance is recognized, unless known or planned operating developments would lead management to conclude otherwise. However, if Ralliant experiences cumulative pretax losses in a particular jurisdiction in the three-year period including the current and prior two years, Ralliant then considers a series of factors in the determination of whether the deferred income tax assets can be realized. These factors include historical operating results, known or planned operating developments, the period of time over which certain temporary differences will reverse, consideration of the utilization of certain deferred income tax liabilities, tax law carryback capability in the particular country, and prudent and feasible tax planning strategies. After evaluation of these factors, if the deferred income tax assets are expected to be realized within the tax carryforward period allowed for that specific country, Ralliant would conclude that no valuation allowance would be required. To the extent that the deferred income tax assets exceed the amount that is expected to be realized within the tax carryforward period for a particular jurisdiction, the Company establishes a valuation allowance and the impact is recorded in income tax expense. Ralliant recognizes tax benefits from uncertain tax positions in income tax expense only if, in its assessment, it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Judgment is required in evaluating tax positions and determining income tax provisions. Ralliant re-evaluates the technical merits of the Company’s tax positions and may recognize an uncertain tax benefit in certain circumstances, including when: (i) a tax audit is completed; (ii) applicable tax laws change, including a tax case ruling or legislative guidance; or (iii) the applicable statute of limitations expires. Ralliant recognizes potential accrued interest and penalties associated with unrecognized tax positions in income tax expense. Refer to Note 13 to the consolidated and combined financial statements included in this Annual Report for additional information. 77 Accumulated Other Comprehensive Loss —AOCI refers to certain gains and losses that under GAAP are included in comprehensive income (loss) but are excluded from Net (loss) earnings as these amounts are initially recorded as an adjustment to Total equity on the Consolidated and Combined Balance Sheets. Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. Refer to Note 11 to the consolidated and combined financial statements included in this Annual Report for additional information. Pension —Ralliant measures its pension assets and obligations to determine the funded status as of December 31 st each year, and recognizes an asset for an overfunded status or a liability for an underfunded status in its Consolidated and Combined Balance Sheets. Changes in the funded status of the pension plans are recognized in the year in which the changes occur and are recorded within Other comprehensive income (loss). Ralliant records all components of net periodic pension costs, with the exception of service costs, in Other non-operating expenses, net , in the accompanying Consolidated and Combined Statements of (Loss) Earnings. Service costs are recorded within Cost of sales and Selling, general, and administrative expenses in the Consolidated and Combined Statements of (Loss) Earnings according to the classification of the participant’s compensation. Refer to Note 10 to the consolidated and combined financial statements included in this Annual Report for additional information on the Company’s pension plans including a discussion of actuarial assumptions. Warranty —Ralliant generally accrues estimated warranty costs at the time of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Warranty period terms depend on the nature of the product and range from 90 days up to the life of the product. The amount of the accrued warranty liability was determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and, in certain instances, estimated property damage. The accrued warranty liability was reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known. New Accounting Pronouncements Issued and Adopted In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which amends the disclosure requirements for reportable segments on an interim and annual basis. On January 1, 2024, the Company adopted ASU 2023-07 using a retrospective approach and updated the applicable annual disclosure to align with the new standard in Note 17. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) —Improvements to Income Tax Disclosures (“ASU 2023-09”), which amends certain disclosure requirements related to income taxes on an annual basis. This standard is effective for fiscal year ending December 31, 2025, and interim periods thereafter. For the year ended December 31, 2025, the Company adopted ASU 2023-09 using a prospective basis and updated the applicable annual disclosure to align with the new standard in Note 13. 78 Issued But Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) — Disaggregation of Income Statement Expenses , which amends the disclosure requirements related to certain costs and expenses on an interim and annual basis. This standard is effective for fiscal year ending December 31, 2027, and interim periods within fiscal year ending December 31, 2028. This standard should be applied either on a prospective basis or retrospective basis. The adoption of the standard is not expected to impact the Company’s consolidated and combined financial statements; however, the Company is currently evaluating the impact of the new disclosure requirements on the notes to the consolidated and combined financial statements. Upon adoption, the Company will update the applicable annual and interim disclosures to align with the new standard. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) — Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides all entities with a practical expedient in developing reasonable and supportable forecasts as part of estimating expected credit losses. An entity may elect the practical expedient when measuring credit losses, to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. This standard is effective for the fiscal year ending December 31, 2026 and interim periods beginning with the first quarter of 2026, with early adoption permitted, and should be applied prospectively. The Company is currently evaluating the effects of this standard; however, it does not anticipate this standard to materially impact its consolidated and combined financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) — Targeted Improvements to the Accounting for Internal-Use Software , which replaces the previous stage-based model for capitalizing internal-use software development costs, with requirements where capitalization begins when management authorizes and commits to funding a project and it is probable the project will be completed and used as intended. This standard is effective for the fiscal year ending December 31, 2028 and interim periods beginning with the first quarter of 2028, with early adoption permitted. The entity can elect to apply the new guidance through a prospective, modified transition, or retrospective approach. The Company is currently evaluating the effects of this standard on its consolidated and combined financial statements. NOTE 3. ACQUISITIONS AND DIVESTITURES Ralliant continually evaluates potential mergers and acquisitions that align with its business portfolio strategy or expand its portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases of businesses and resulted in the recognition of goodwill in its consolidated and combined financial statements. This goodwill arises when the purchase price for an acquired business exceeds its identifiable assets, net of liabilities. The purchase price for acquired businesses reflect a number of factors, including the future earnings and cash flow potential of the business, the strategic fit, and resulting synergies from the complementary portfolio of the acquired business to Ralliant’s existing operations, industry expertise, and market access. Acquisitions EA Elektro-Automatik Holding GmbH (“EA”), a leading supplier of high-power electronic test solutions for energy storage, mobility, hydrogen, and renewable energy applications, was acquired in January 2024. The acquisition of EA bolsters Ralliant’s innovative portfolio of products and services for engineers with complementary test and measurement solutions enabling the global energy transition. The total consideration paid was approximately $ 1.72 billion, net of acquired cash. Ralliant recorded approximately $ 1.18 billion of goodwill within its Test and Measurement segment related to the EA acquisition, which was not tax deductible. For the year ended December 31, 2024, Ralliant incurred $ 33.2 million of pretax transaction-related costs related to the EA acquisition, which were primarily banking fees, legal fees, and amounts paid to other third-party advisers. These costs were recorded within Selling, general, and administrative expenses in the Consolidated and Combined Statements of (Loss) Earnings. The revenue and operating loss attributable to the EA acquisition was $ 118.9 million and $ 46.6 million, respectively, for the year ended December 31, 2024. The operating loss included $ 81.0 million of intangible asset amortization, which was recorded in Selling, general and administrative expenses. 79 The fair value of the net assets acquired was based on estimates and assumptions. Significant assumptions included the discount rates and certain assumptions that form the basis of the forecasted cash flows of the acquired business including earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, revenue growth rates, royalty rates, customer attrition rates, and technology obsolescence rates. The following table summarizes the estimated acquisition date fair values of the assets acquired and liabilities assumed as of December 31, 2024: Total Accounts receivable $ 18.1 Inventories 34.4 Property, plant and equipment 19.7 Goodwill 1,175.0 Other intangible assets (customer relationships, technology, and trade names) 681.2 Deferred tax liabilities ( 191.8 ) Other assets and liabilities, net ( 18.4 ) Net cash consideration $ 1,718.2 Divestitures In June 2024, Invetech, excluding the Dover Motion business, was divested to Invetech’s management team. As a result of the Invetech Divestiture, in the year ended December 31, 2024, a net realized loss of $ 25.6 million was recorded, which was identified as “Loss from divestiture” in the Consolidated and Combined Statements of (Loss) Earnings. The divested businesses accounted for less than 2 % of total revenue and approximately 1 % of total assets for the fiscal year ended December 31, 2023. The Invetech Divestiture did not represent a strategic shift with a major effect on the Ralliant’s operations and financial results, and therefore the divested businesses were not reported as discontinued operations. NOTE 4. PROPERTY, PLANT, AND EQUIPMENT The classes of property, plant, and equipment as of December 31 are summarized as follows: 2025 2024 Land and improvements $ 35.1 $ 35.9 Buildings and leasehold improvements 159.5 143.7 Machinery, equipment and other 459.7 424.0 Gross property, plant and equipment 654.3 603.6 Less: accumulated depreciation ( 468.7 ) ( 437.0 ) Construction in progress 28.6 33.6 Property, plant and equipment, net $ 214.2 $ 200.2 Property Sale In March 2024, Test and Measurement segment sold land and certain office buildings for $ 90 million, for which all proceeds were transferred to the Former Parent in 2024. During the year ended December 31, 2024, Ralliant recorded a gain on sale of property of $ 63.1 million in the Consolidated and Combined Statements of (Loss) Earnings. NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill arises from the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired, less assumed liabilities. Ralliant assesses the goodwill of each of its reporting units for impairment at least annually as of the first day of the fourth quarter and as “triggering” events occur that indicate that it is more likely than not that an impairment exists. Ralliant performs both qualitative and quantitative impairment tests for reporting units, as determined to be appropriate. Ralliant first assesses its indefinite-lived and finite-lived intangible assets for impairment, prior to completing the impairment assessment for its reporting units. 80 Annual Impairment Testing - Goodwill and Other Indefinite-Lived Intangible Assets In the fourth quarter of 2025, the Company performed a qualitative analysis for all reporting units and other indefinite-lived intangible assets. Under ASC 350, the Company has an option to perform a qualitative assessment of its reporting units and other indefinite-lived intangible assets to determine whether further impairment testing is necessary. In this qualitative assessment, the Company considers the following items for each of the reporting units and other indefinite-lived intangible assets: macroeconomic conditions, industry and market conditions, overall financial performance, and other entity specific events. If it is determined it is not more likely than not that the fair value exceeds the carrying value, no further testing is required. If it is determined that it is more likely than not that the fair value does not exceed the carrying value, further testing is required and, the Company will continue with the quantitative impairment test. Based on the results of the qualitative assessment, the Company concluded it was more likely than not that the Test and Measurement reporting unit and Tektronix indefinite-lived trade name carrying values exceeded the fair values and a quantitative assessment was performed. The carrying values of the remaining reporting units goodwill and other indefinite-lived intangible assets at the annual impairment testing date of September 27, 2025, were $ 770.5 million and $ 17.5 million, respectively. The Company concluded it was more likely than not that the fair values exceeded the carrying values of these assets. In performing the quantitative impairment testing for the Tektronix indefinite-lived trade name, the Company estimated the fair value based on an income approach using the relief-from-royalty method. Key assumptions developed by management and used in the quantitative analysis of the Tektronix indefinite-lived trade name included: • Financial projections and future cash flows associated with the trade name, including revenue growth rates, throughout the forecast period reflect the approved operating budget and strategic plan, as well as current industry trends and growth expectations; • Terminal growth rates based on the expected long-term growth rate of the business; • Royalty rates based on market data as well as historical royalty rates; and • Market-based discount rates. In performing the quantitative impairment testing for the Test and Measurement reporting unit, the Company estimated the fair value of the reporting unit using both income-based and market-based valuation methods. Based on the estimated fair values developed from the income- and market-based methods, the Company determined the estimated fair value for the reporting unit as compared to the carrying value. The income-based approach was based on the reporting unit’s forecasted future cash flows that were discounted to present value using the reporting unit’s weighted average cost of capital (“WACC”). For the market-based approach, management used the guideline public company method. The guideline public company method analyzed market multiples of EBITDA for a group of comparable public companies. Key assumptions developed by management and used in the quantitative analysis of the Test and Measurement reporting unit included: • Financial projections and future cash flows, including a base year that considered recent actual results lower than previous internal forecasts and lower than original projections included in the EA acquisition model, revenue growth rates and profitability margin improvement throughout the forecast period that reflects the long-term strategy for the business as well as revised industry outlook and expectations, specifically within the EV market; • Terminal growth rates based on the expected long-term growth rate of the business; and • Market-based discount rates. The factors and assumptions used by management in its impairment analysis are inherently subject to uncertainty. If actual results are not consistent with management’s estimates and assumptions, an additional impairment charge against Net (loss) earnings could occur in the future. 81 As a result of the quantitative assessment for the Tektronix indefinite-lived trade name, the Company concluded the fair value exceeds the carrying value and no impairment was recorded for the year ended December 31, 2025. No impairment charge for other indefinite-lived intangible assets was recorded for the years ended December 31, 2024 and 2023. As a result of the quantitative assessment for the Test and Measurement reporting unit, the Company concluded the fair value did not exceed the carrying value and recorded an impairment charge, primarily driven by revised expectations for the EA Elektro-Automatik business, reflecting slower-than-anticipated progression and recent reduction in industry forecasts of future EV adoption, to the Test and Measurement reporting unit goodwill of $ 1.44 billion in the Consolidated and Combined Statement of Earnings for the year ended December 31, 2025. The remaining carrying value of the Test and Measurement reporting unit goodwill after the impairment charge was $ 901.3 million. No goodwill impairment charge was recorded for the years ended December 31, 2024 and 2023. Ralliant assessed “triggering” events subsequent to the 2025 annual impairment test and, as a result, did not identify any further impacts to goodwill or other indefinite-lived intangible assets . Impairment Testing - Finite-Lived Intangible Assets Ralliant reviews identified intangible assets with finite lives for impairment whenever events or changes in circumstances present indicators that the related carrying amounts may not be recoverable. If indicators are present, the Company performs a recoverability test using a comparison of the carrying amount to the sum of undiscounted cash flows expected to be generated by the asset. If the undiscounted cash flows are less than the carrying amount for an asset, the Company estimates the fair value of the intangible asset and recognizes an impairment loss if the carrying amount exceeds its fair value. The Company evaluated events or circumstances that may indicate the carrying value of its definite-lived intangible assets may not be fully recoverable during the year ended December 31, 2025, and recorded no impairments. Goodwill The following is a rollforward of the Company’s carrying value of goodwill by segment: Test and Measurement Sensors and Safety Systems Total Balance, December 31, 2023 $ 1,086.7 $ 769.8 $ 1,856.5 Attributable to current year acquisitions 1,175.0 — 1,175.0 Foreign currency translation ( 87.7 ) ( 3.8 ) ( 91.5 ) Balance, December 31, 2024 $ 2,174.0 $ 766.0 $ 2,940.0 Goodwill impairment ( 1,441.7 ) — ( 1,441.7 ) Foreign currency translation 169.0 5.1 174.1 Balance, December 31, 2025 $ 901.3 $ 771.1 $ 1,672.4 82 Other Intangible Assets Finite-lived intangible assets are amortized over the shorter of their legal or estimated useful lives. The following summarizes the gross carrying value and accumulated amortization for each major category of intangible assets as of December 31: 2025 2024 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Finite-lived intangibles: Patents and technology $ 378.7 $ ( 277.9 ) $ 351.5 $ ( 242.7 ) Customer relationships and other intangibles 877.2 ( 466.9 ) 820.1 ( 403.0 ) Trademarks and trade names 57.6 ( 11.6 ) 51.1 ( 5.3 ) Total finite-lived intangibles 1,313.5 ( 756.4 ) 1,222.7 ( 651.0 ) Indefinite-lived intangibles: Trademarks and trade names 238.1 — 237.9 — Other intangibles assets, net $ 1,551.6 $ ( 756.4 ) $ 1,460.6 $ ( 651.0 ) As a result of the EA acquisition in January 2024, Ralliant acquired finite-lived intangible assets consisting of customer relationships, developed technology, and trade names, with a weighted-average life of approximately nine years . Refer to Note 3 to the consolidated and combined financial statements included in this Annual Report for additional information on the intangible assets acquired. Total intangible asset amortization expense in 2025, 2024, and 2023 was $ 86.9 million, $ 84.0 million, and $ 3.6 million, respectively. Based on the intangible assets recorded as of December 31, 2025, amortization expense is estimated to be $ 89.6 million during 2026, $ 89.5 million during 2027, $ 89.1 million during 2028, $ 57.8 million during 2029, and $ 57.8 million during 2030. NOTE 6. FAIR VALUE MEASUREMENTS Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value for assets and liabilities required to be carried at fair value, and provide for certain disclosures related to the valuation methods used within the valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows: • Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. • Level 3 inputs are unobservable inputs based on the Company’s assumptions. A financial asset’s or liability’s classification within the hierarchy was determined based on the lowest level input that is significant to the fair value measurement in its entirety. Financial assets and liabilities that are measured at fair value on a recurring basis were as follows: Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total December 31, 2025 Deferred compensation liabilities $ — $ 9.3 $ — $ 9.3 December 31, 2024 Deferred compensation liabilities $ — $ 13.0 $ — $ 13.0 83 Certain management employees participate in the Company’s nonqualified deferred compensation program that permits such employees to defer a portion of their compensation, on a pretax basis, until after their termination of employment. All amounts deferred under such plan are unfunded, unsecured obligations. These amounts are recorded as a component of the Company’s compensation and other post-retirement benefits accruals within Other long-term liabilities in the accompanying Consolidated and Combined Balance Sheets. Participants may choose among alternative earning rates for the amounts they defer, which are primarily based on investment options within Ralliant’s defined contribution plans for the benefit of U.S. employees (except that the earnings rates for amounts contributed unilaterally by the Company are entirely based on changes in the value of Ralliant common stock). Changes in the deferred compensation liability under these programs are recognized based on changes in the fair value of the participants’ accounts and are recorded within Selling, general and administrative expenses in the Consolidated and Combined Statements of (Loss) Earnings and impact cash flows from operating activities. As a result of the Separation, accounts held by Ralliant employees in Fortive’s deferred compensation programs referencing valuation of Fortive’s common stock were converted into accounts in Ralliant’s deferred compensation programs referencing valuation of Ralliant’s common stock, and with such accounts adjusted to maintain the economic value before and after the Separation date using the relative fair market value of the Fortive and Ralliant common stocks. Non-recurring Fair Value Measurements Certain non-financial assets, primarily property, plant, and equipment, goodwill, and intangible assets, are not required to be measured at fair value on a recurring basis and are reported at their carrying value. However, these assets are required to be assessed for impairment, at least annually for goodwill and other indefinite-lived intangible assets, or whenever events or circumstances indicate that their carrying value may not be fully recoverable. Refer to Note 2 and Note 5 to the consolidated and combined financial statements included in this Annual Report for additional information about these assets. Fair Value of Other Financial Instruments The carrying amount and fair value of other financial instruments as of December 31 were as follows: 2025 Carrying Amount Fair Value Current portion of long-term debt $ 530.4 $ 530.4 Long-term debt $ 618.4 $ 618.4 As of December 31, 2025, the Company’s long-term debt was categorized as Level 2. The Company’s fair value of long-term borrowings approximates their carrying amount due to the variable market-based interest rate. The fair value of cash and equivalents, trade accounts receivable, net, and trade accounts payable, approximates their carrying amount due to the short-term maturities of these instruments. The Company did not have any debt as of December 31, 2024 . Refer to Note 10 to the consolidated and combined financial statements included in this Annual Report for information related to the fair value of the assets related to the significant Company-sponsored noncontributory defined benefit pension plans. 84 NOTE 7. ACCRUED EXPENSES AND OTHER CURRENT AND LONG-TERM LIABILITIES Accrued expenses and other current and long-term liabilities as of December 31 were as follows: 2025 2024 Current Long-term Current Long-term Deferred revenue $ 154.6 $ 38.7 $ 143.1 $ 35.8 Compensation and other post-retirement benefits 96.2 21.1 60.8 18.6 Taxes (income and other) 23.7 218.5 5.4 240.9 Operating lease liabilities 16.1 58.1 12.0 59.7 Pension obligations 3.9 53.2 3.3 52.3 Other 71.1 19.6 54.5 15.6 Total $ 365.6 $ 409.2 $ 279.1 $ 422.9 NOTE 8. LEASES Ralliant determines if an arrangement is, or contains, a lease at inception and recognizes a right-of-use (“ROU”) asset and a lease liability for all leases with terms greater than 12 months. Ralliant has operating leases for office space, warehouses, distribution centers, research and development facilities, manufacturing locations, and certain equipment, primarily automobiles. Many leases include optional terms, ranging from options to terminate the lease in less than one year to options to extend the lease for up to 10 years. Ralliant includes optional periods as part of the lease term when Ralliant determines that it is reasonably certain to exercise the renewal option or it will not early terminate the lease. Reasonably certain is based on economic incentives and represents a high threshold. Ralliant has lease agreements with lease and non-lease components and has elected the practical expedient for all underlying asset classes to account for the lease and related non-lease component(s) as a single lease component. Lease-related balances are recorded within the following three line items on the Consolidated and Combined Balance Sheets: (i) Other assets ; (ii) Accrued expenses and other current liabilities ; and (iii) Other long-term liabilities . Operating lease cost was $ 20.1 million, $ 18.9 million, and $ 14.2 million for the years ended December 31, 2025, 2024, and 2023, respectively, and are recorded within Cost of sales and Selling, general, and administrative expenses in the Company’s Consolidated and Combined Statement of Earnings. During the years ended December 31, 2025, 2024, and 2023, cash paid for operating leases included in operating cash flows was $ 17.3 million, $ 16.5 million, and $ 13.9 million, respectively. Operating lease ROU assets obtained in exchange for operating lease liabilities were $ 7.0 million and $ 28.7 million for the years ended December 31, 2025 and 2024, respectively. Operating lease ROU assets were $ 68.4 million and $ 72.4 million as of December 31, 2025 and 2024, respectively. Operating lease liabilities were $ 74.2 million and $ 71.7 million as of December 31, 2025 and 2024, respectively. The following table presents the maturities of the Company’s operating lease liabilities as of December 31, 2025: 2026 $ 18.9 2027 14.4 2028 11.9 2029 9.9 2030 8.7 Thereafter 27.1 Total lease payments 90.9 Less: imputed interest ( 16.7 ) Total operating lease liabilities $ 74.2 85 As of December 31, 2025 and 2024, the weighted-average lease term of Ralliant’s opera ting leas es was 6.7 years and 7.7 years, respectively, and the weighted-average discount rate of Ralliant’s operating leases was 4.6 % and 4.9 %, respectively . Ralliant primarily uses its incremental borrowing rate as the discount rate for its operating leases as the Company has generally been unable to determine the interest rate implicit in the lease. Ralliant entered into a 10 -year lease agreement for its corporate headquarters that had not yet commenced as of December 31, 2025. The estimated average annual lease payments under this agreement are $ 1.3 million. NOTE 9. FINANCING The components of the Company’s long-term debt as of December 31 were as follows: Effective Interest Rate 2025 2024 USD Term Loan due December 2026 4.81 % $ 530.8 $ — USD Term Loan due June 2028 4.94 % 619.2 — Long-term debt, principal amounts 1,150.0 — Less: aggregate unamortized debt discounts, premiums, and issuance costs 1.2 — Long-term debt, carrying value 1,148.8 $ — Less: current portion of long-term debt, carrying value 530.4 — Long-term debt, net of current maturities $ 618.4 $ — Term Loans due December 2026 and June 2028 and Revolving Credit Facility On May 15, 2025 (the “Closing Date”), the Company en tered into a credit agreement (the “Credit Agreement”), with a syndicate of banks. This included an eighteen month , $ 600.0 million senior unsecured delayed-draw term loan facility (the “ Eighteen-Month Term Loan”), a three-year , $ 700.0 million senior unsecured delayed-draw term loan facility (the “ Three-Year Term Loan”, and together with the Eighteen-Month Term Loan, the “Term Loans”) and a five-year $ 750.0 million senior unsecured multi-currency revolving credit facility, including a $ 25.0 million sublimit for swingline loans and a $ 75.0 million sublimit for the issuance of letters of credit (the “Revolving Credit Facility” and, together with the Term Loans, the “Credit Facilities”). The Credit Agreement contains an option to request increases of the Credit Facilities (in any combination thereof) of up to an aggregate amount of $ 500.0 million, subject to lender agreement, and upon the satisfaction of certain conditions. The Company recorded $ 1.4 million of unamortized debt issuance costs, associated with the Revolving Credit Facility, as a prepaid asset within Other assets in the accompanying Consolidated and Combined Balance Sheets, as this facility was undrawn and the letters of credit were unused as of December 31, 2025. Borrowings under the Credit Facilities bear interest as follows: (1) Term Secured Overnight Financing Rate (“SOFR”) Loans (as defined in the Credit Agreement) bear interest at a variable rate equal to the Adjusted Term SOFR Reference Rate (as defined in the Credit Agreement) of between 87.5 and 162.5 basis points, depending on Ralliant’s Consolidated Net Leverage Ratio (as defined in the Credit Agreement) as of the last day of the immediately preceding fiscal quarter; and (2) Base Rate Loans (as defined in the Credit Agreement) bear interest at a variable rate equal to (a) the highest of (i) the Overnight Rate (as defined in the Credit Agreement) plus 1/2 of 1%, (ii) PNC Bank, National Association’s “prime rate” as publicly announced from time to time and (iii) the Adjusted Term SOFR Rate (as defined in the Credit Agreement) plus 1 %, or (iv) 1.00 %, plus (b) a per annum margin of between 0 and 62.5 basis points, depending on Ralliant’s Consolidated Net Leverage Ratio as of the last day of the immediately preceding fiscal quarter. In no event will Term SOFR Loans bear interest at a rate lower than 0 % nor will Base Rate Loans bear interest at a rate lower than 1 %. The Company is obligated to pay an annual facility fee for the Revolving Credit Facility of between 90 and 200 basis points, based on its Consolidated Net Leverage Ratio. Borrowings under the Credit Agreement are prepayable at any time in whole or in part without premium or penalty. Term Loans may not be reborrowed once repaid. Amounts borrowed under the Revolving Credit Facility may be repaid and reborrowed prior to the maturity date. 86 Ralliant must maintain a Consolidated Net Leverage Ratio, as defined by the Credit Agreement, of 3.50 to 1.00 or less; provided that, not more than two times after the Closing Date of the Credit Agreement, the maximum Consolidated Net Leverage Ratio may be increased to 4.00 to 1.00 in connection with any permitted acquisition by Ralliant occurring after the Closing Date with aggregate consideration (including, without duplication, the assumption or incurrence of indebtedness in connection with such acquisition) equal to or in excess of $ 100.0 million, which such increase shall be applicable for the fiscal quarter in which such acquisition is consummated and the three consecutive quarters thereafter; provided that, there shall be at least one full fiscal quarter following the cessation of each such increase during which no such increase shall then be in effect. The Consolidated Net Leverage Ratio is calculated at the end of each fiscal quarter and commenced in the fiscal quarter ending September 26, 2025. Amendment On November 24, 2025, Ralliant, entered into Amendment No. 1 to the Credit Agreement (the “Amendment”). The Amendment (i) removes the credit spread adjustment and thereby reduces the Term SOFR interest rate applicable to the Company’s revolving credit facility and term loans by 0.10 %, (ii) eliminates the ratings-based pricing grid that previously applied to the Company’s revolving credit facility and term loans upon receipt of a debt rating, and (iii) permanently reduces the outstanding undrawn commitments by the applicable lenders under the Three-Year Term Loan and the Eighteen-Month Term Loan to zero , thereby eliminating the 0.125 % ticking fee on undrawn term loan commitments. All other material terms of the Credit Agreement remain in full force and effect as originally executed. The Term Loans contain customary covenants. None of these covenants are considered restrictive to Ralliant’s operations. As of December 31, 2025, Ralliant was in compliance with all of the covenants under the Credit Agreement and the Amendment. The Company’s future minimum principal payments due are presented in the following table: 2026 $ 530.8 2027 — 2028 619.2 Thereafter — Total principal payments $ 1,150.0 The Company made interest payments of $ 32.2 million during the year ended December 31, 2025. There were no interest payments during the years ended December 31, 2024 and 2023. NOTE 10. RETIREMENT BENEFIT PLANS Certain of Ralliant’s employees participate in noncontributory defined benefit pension plans. In general, the Company’s policy is to fund these plans based on considerations relating to legal requirements, underlying asset returns, the plan’s funded status, the anticipated deductibility of the contribution, local practices, market conditions, interest rates, and other factors. Ralliant’s U.S. pension plans are frozen and there are no associated ongoing benefit accruals. As such, the U.S. pension plans are immaterial as of each period presented. The following describes the Company’s significant non-U.S. pension plans as of December 31, 2025 and 2024. 87 The following sets forth the funded status of Ralliant’s non-U.S. plans and amounts recorded in AOCI as of the most recent actuarial valuations using measurement dates of December 31: 2025 2024 Change in pension benefit obligation: Benefit obligation at beginning of year $ 119.4 $ 132.8 Service cost 1.5 0.3 Interest cost 5.1 4.8 Employee contributions 0.2 0.2 Benefits paid ( 8.6 ) ( 7.2 ) Actuarial gain ( 4.7 ) ( 4.5 ) Settlements ( 0.3 ) ( 1.8 ) Foreign exchange rate impact 12.5 ( 5.2 ) Plan acquisitions and other ( 0.8 ) — Benefit obligation at end of year 124.3 119.4 Change in plan assets: Fair value of plan assets at beginning of year 73.0 83.9 Actual return on plan assets 2.1 ( 4.5 ) Employer contributions 4.9 4.1 Employee contributions 0.2 0.2 Settlements ( 0.3 ) ( 1.8 ) Benefits paid ( 8.5 ) ( 7.2 ) Foreign exchange rate impact 5.9 ( 1.7 ) Plan acquisitions and other ( 1.8 ) — Fair value of plan assets at end of year 75.5 73.0 Funded status $ ( 48.8 ) $ ( 46.4 ) Amounts recorded in the Consolidated and Combined Balance Sheets as of December 31: 2025 2024 Other assets $ 8.3 $ 9.2 Accrued expenses and other current liabilities ( 3.9 ) ( 3.3 ) Other long-term liabilities ( 53.2 ) ( 52.3 ) Net amount $ ( 48.8 ) $ ( 46.4 ) Amounts recorded in AOCI as of December 31: 2025 2024 Prior service credit $ ( 1.2 ) $ ( 1.2 ) Net gain ( 18.3 ) ( 20.3 ) Total pre-tax amount $ ( 19.5 ) $ ( 21.5 ) Weighted average assumptions used to determine benefit obligations at date of measurement 2025 2024 Discount rate 4.54 % 4.22 % Rate of compensation increase 2.93 % 2.93 % 88 Components of net periodic pension cost The following sets forth the components of net periodic pension cost for Ralliant’s non-U.S. plans for the years ended December 31: 2025 2024 2023 Service cost $ 1.5 $ 0.3 $ 0.3 Interest cost 5.1 4.8 5.2 Expected return on plan assets ( 3.5 ) ( 4.0 ) ( 3.9 ) Amortization of net loss 0.6 0.3 0.3 Amortization of prior service cost 0.1 0.1 0.2 Net settlement loss recognized — 0.2 — Net periodic pension cost $ 3.8 $ 1.7 $ 2.1 Weighted average assumptions used to determine net periodic pension cost at date of measurement 2025 2024 2023 Discount rate 4.22 % 3.88 % 4.33 % Expected return on plan assets 4.92 % 5.02 % 5.07 % Rate of compensation increase 2.93 % 2.95 % 3.10 % The discount rates reflect the market rates on December 31 for high-quality fixed-income investments with maturities corresponding to the Company’s benefit obligations and are subject to change each year. Rates appropriate for each plan are determined based on investment grade instruments with maturities approximately equal to the average expected benefit payout under the plan. The expected rates of return reflect the asset allocation of the plans and ranged from 2.8 % to 5.4 % in 2025, 2.5 % to 5.4 % in 2024, and 1.5 % to 5.5 % in 2023. The expected rat es of return on asset assumptions for the non-U.S. plans were determined on a plan-by-plan basis based on the composition of the fair value of plan assets and historical rates of return. Plan Assets Plan assets are invested in various mutual funds, insurance contracts, and other private investments as determined by the administrator of each plan based on an analysis of the liability profile of each plan, the required investment return, and the returns expected from the various asset classes over the long-term. Certain mutual funds and other private investments are valued using the net asset value (“NAV”) method as a practical expedient. The investments valued using the NAV method are allocated across a broad array of funds and diversify the portfolio. The value of the plan assets directly affects the funded status of the Company’s pension plans recorded in the financial statements. The fair values of Ralliant’s pension plan assets as of December 31, 2025 by asset category were as follows: Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Cash and equivalents $ 7.1 $ — $ — $ 7.1 Mutual funds — 52.8 — 52.8 Insurance contracts — 5.6 — 5.6 Total $ 7.1 $ 58.4 $ — $ 65.5 Investments measured at NAV (a) : Mutual funds and other private investments 10.0 Total assets at fair value $ 75.5 (a) The fair value amounts presented in the table above are intended to permit reconciliation of the fair value hierarchy to the total fair value of plan assets. 89 The fair values of Ralliant’s pension plan assets as of December 31, 2024 by asset category were as follows: Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Cash and equivalents $ 43.2 $ — $ — $ 43.2 Mutual funds — 15.9 — 15.9 Insurance contracts — 5 — 5 Total $ 43.2 $ 20.9 $ — $ 64.1 Investments measured at NAV (a) : Mutual funds and other private investments 8.9 Total assets at fair value $ 73.0 (a) The fair value amounts presented in the table above are intended to permit reconciliation of the fair value hierarchy to the total fair value of plan assets. Certain mutual funds are valued at the quoted closing price reported on the active market on which the individual securities are traded. Common stock, corporate bonds, and mutual funds that are not traded on an active market are valued at quoted prices reported by investment brokers and dealers based on the underlying terms of the security and comparison to similar securities traded on an active market. Certain mutual funds and other private investments are valued using NAV based on the information provided by the asset fund managers, which reflects the plan’s share of the fair value of the net assets of the investment. Expected Contributions During 2025, the Company contributed $ 4.9 million to its non-U.S. defined benefit pension plans. During 2026, the Company’s cash contribution requirements for its non-U.S. defined benefit pension plans are expected to be approximately $ 5.7 million. The following sets forth benefit payments to participants, which reflect expected future service, as appropriate, expected to be paid by the plans in the periods indicated: 2026 $ 9.0 2027 8.8 2028 9.8 2029 8.8 2030 8.9 2031-2035 43.1 Defined Contribution Plans Contributions to the 401(k) programs are determined based on a percentage of compensation. The Company recognized compensation expense, based on the Company’s 401(k) match percentage for its participating U.S. employees in the 401(k) programs, totaled $ 22.1 million, $ 22.1 million, and $ 21.8 million in 2025, 2024, and 2023, respectively. 90 NOTE 11. ACCUMULATED OTHER COMPREHENSIVE LOSS Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. The changes in AOCI by component are summarized below: Foreign currency translation adjustments Pension & post- retirement plan benefit adjustments (b) Total Balance, December 31, 2022 $ ( 332.9 ) $ ( 12.3 ) $ ( 345.2 ) Other comprehensive loss before reclassifications: Decrease ( 5.5 ) ( 3.5 ) ( 9.0 ) Income tax impact — 0.6 0.6 Other comprehensive loss before reclassifications, net of income taxes ( 5.5 ) ( 2.9 ) ( 8.4 ) Amounts reclassified from AOCI into income: Increase — 0.5 (a) 0.5 Income tax impact — ( 0.1 ) ( 0.1 ) Amounts reclassified from AOCI into income, net of income taxes: — 0.4 0.4 Net current period other comprehensive loss ( 5.5 ) ( 2.5 ) ( 8.0 ) Balance, December 31, 2023 $ ( 338.4 ) $ ( 14.8 ) $ ( 353.2 ) Other comprehensive loss before reclassifications: Decrease ( 153.4 ) ( 3.4 ) ( 156.8 ) Income tax impact 10.3 0.8 11.1 Other comprehensive loss before reclassifications, net of income taxes ( 143.1 ) ( 2.6 ) ( 145.7 ) Amounts reclassified from AOCI into income: Increase 7.0 (c) 0.7 (a) 7.7 Income tax impact — ( 0.1 ) ( 0.1 ) Amounts reclassified from AOCI into income, net of income taxes 7.0 0.6 7.6 Net current period other comprehensive loss ( 136.1 ) ( 2.0 ) ( 138.1 ) Balance, December 31, 2024 $ ( 474.5 ) $ ( 16.8 ) $ ( 491.3 ) Other comprehensive income before reclassifications: Increase 268.9 1.5 270.4 Income tax impact ( 24.2 ) ( 0.2 ) ( 24.4 ) Other comprehensive income before reclassifications, net of income taxes 244.7 1.3 246.0 Amounts reclassified from AOCI into income: Increase — 0.5 (a) 0.5 Income tax impact — ( 0.1 ) ( 0.1 ) Amounts reclassified from AOCI into income, net of income taxes — 0.4 0.4 Net current period other comprehensive income 244.7 1.7 246.4 Balance, December 31, 2025 $ ( 229.8 ) $ ( 15.1 ) $ ( 244.9 ) (a) This component of AOCI is included in the computation of net periodic pension cost (refer to Note 10 to the consolidated and combined financial statements included in this Annual Report). (b) Includes balances relating to defined benefit plans, supplemental executive retirement plans, and other postretirement employee benefit plans. (c) This amount relates to the cumulative translation adjustment recognized in earnings upon the Invetech Divestiture. Refer to Note 3 to the consolidated and combined financial statements included in this Annual Report for additional details. 91 NOTE 12. SALES Ralliant derives revenue primarily from the sale of products, with additional revenue from the sale of services. Revenue is recognized when control of promised products or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. Product sales include revenue from the sale of products and equipment. Service sales include revenues from extended warranties, maintenance contracts or services, and services related to previously sold products. Contract Liabilities — The Company’s contract liabilities consist of deferred revenue generally related to customer deposits received in advance of performance under the contract, extended warranty sales, and product maintenance agreements, where the Company generally receives up-front payment and recognizes revenue over the service or support term. The Company classifies deferred revenue as current or noncurrent based on the timing of when it expects to recognize revenue. The noncurrent portion of deferred revenue is recorded within Other long-term liabilities in the accompanying Consolidated and Combined Balance Sheets. The Company’s contract liabilities as of December 31 consisted of the following: 2025 2024 Deferred revenue - current $ 154.6 $ 143.1 Deferred revenue - noncurrent 38.7 35.8 Total contract liabilities $ 193.3 $ 178.9 For the year ended December 31, 2025, the Company recognized $ 98.5 million of revenue related to its contract liabilities at January 1, 2025. The change in the Company’s contract liabilities from December 31, 2024 to December 31, 2025 was primarily due to revenue recognized as products were delivered to customers. Remaining Performance Obligations — Ralliant’s remaining performance obligations represent the transaction price of firm, non-cancelable orders, for which work has not yet been performed. The Company has excluded performance obligations with an original expected duration of one year or less from the amounts below. The aggregate remaining performance obligations attributable to each of the Company’s segments as of December 31, 2025 is as follows: Test and Measurement $ 55.6 Sensors and Safety Systems 5.5 Total remaining performance obligations $ 61.1 The majority of remaining performance obligations are related to service and support contracts, which the Company expects to fulfill approximately 60 % within the next two years , approximately 80 % within the next three years , and substantially all within four years . Disaggregation of Revenue The Company disaggregates revenue from contracts with customers by geographic locations and end markets for each of its segments as the Company believes it best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. For the years ended December 31, 2025, 2024, and 2023 no other country than those presented, had material sales individually. 92 Disaggregation of revenue for the year ended December 31, 2025 was: Total Test and Measurement Sensors and Safety Systems Geographic: United States $ 1,060.3 $ 283.9 $ 776.4 China 299.2 177.5 121.7 All other 709.3 340.1 369.2 Total $ 2,068.8 $ 801.5 $ 1,267.3 End markets: Diversified electronics $ 383.6 $ 383.6 $ — Communications 254.3 254.3 — Semiconductors 163.6 163.6 — Industrial manufacturing 427.6 — 427.6 Defense and space 355.4 — 355.4 Utilities 305.7 — 305.7 Other 178.6 — 178.6 Total $ 2,068.8 $ 801.5 $ 1,267.3 Disaggregation of revenue for the year ended December 31, 2024 was: Total Test and Measurement Sensors and Safety Systems Geographic: United States $ 1,089.2 $ 332.9 $ 756.3 China 322.7 214.7 108.0 All other 742.8 389.9 352.9 Total $ 2,154.7 $ 937.5 $ 1,217.2 End markets: Diversified electronics $ 474.3 $ 474.3 $ — Communications 274.9 274.9 — Semiconductors 188.3 188.3 — Industrial manufacturing 410.8 — 410.8 Defense and space 340.2 — 340.2 Utilities 273.0 — 273.0 Other 193.2 — 193.2 Total $ 2,154.7 $ 937.5 $ 1,217.2 93 Disaggregation of revenue for the year ended December 31, 2023 was: Total Test and Measurement Sensors and Safety Systems Geographic: United States $ 1,132.9 $ 357.8 $ 775.1 China 359.2 247.3 111.9 All other 663.6 336.2 327.4 Total $ 2,155.7 $ 941.3 $ 1,214.4 End markets: Diversified electronics $ 456.4 $ 456.4 $ — Communications 300.6 300.6 — Semiconductors 184.3 184.3 — Industrial manufacturing 480.5 — 480.5 Defense and space 285.3 — 285.3 Utilities 233.1 — 233.1 Other 215.5 — 215.5 Total $ 2,155.7 $ 941.3 $ 1,214.4 NOTE 13. INCOME TAXES Separation from Fortive Prior to the Separation, Ralliant’s operating results were included in Fortive’s various consolidated U.S. federal and certain state income tax returns, as well as certain non-U.S. returns. For periods prior to the Separation, Ralliant’s combined financial statements reflect income tax expense and deferred tax balances as if it had filed tax returns on a standalone basis separate from Fortive. The separate return method applies the accounting guidance for income taxes to the standalone financial statements as if Ralliant was a separate taxpayer and a standalone enterprise for periods prior to the Separation. In connection with the Separation, the Company entered into certain agreements with Fortive, including the Tax Matters Agreement (as defined below). The Tax Matters Agreement differentiates the treatment of tax matters arising from “joint” tax filings and “separate” tax filings for periods prior to the Separation. “Joint” filings generally relate to legal entities, including those in the United States, whose tax returns included the operations of both Fortive and the Company. In contrast, “separate” filings generally relate to certain entities, primarily outside the United States, whose tax returns included only the operations of either Fortive or the Company, as applicable. Pursuant to the Tax Matters Agreement, Fortive is responsible for, and has agreed to indemnify the Company against, all income tax liabilities attributable to “joint” filings for periods prior to the Separation. The Company remains responsible for certain pre-Separation income tax liabilities, including those attributable to its “separate” filings. The Company is routinely examined by various domestic and international taxing authorities. The amount of income taxes the Company pays is subject to audit by federal, state, local, and foreign tax authorities, which may result in proposed assessments. The Company is subject to examination in the United States, various states, and foreign jurisdictions. In accordance with the Tax Matters Agreement with Fortive, the Company is liable for taxes arising from examinations of the following; (i) the Company’s initial U.S. federal taxable year June 28, 2025 through December 31, 2025; (ii) separate company state tax returns for all periods; and (iii) international separate company returns for all periods. The Company reviews its global tax positions on a quarterly basis. Based on these reviews, the results of discussions and resolutions of matters with certain tax authorities, tax rulings, and court decisions, and the expiration of statutes of limitations, reserves for contingent tax liabilities are accrued or adjusted as necessary. Pursuant to U.S. tax law, the Company’s initial U.S. federal income tax return is for the short taxable year June 28, 2025 through December 31, 2025. The Company expects to file its initial U.S. federal income tax return for the 2025 short tax year with the Internal Revenue Service (“IRS”) during 2026. Therefore, the IRS has not yet begun examination of the Company. The Company remains subject to tax audit for its separate company tax returns in various U.S. states and foreign jurisdictions for the tax years 2014 to 2025. 94 Earnings and Income Taxes Earnings before income taxes for the years ended December 31 were as follows: 2025 2024 2023 United States $ ( 228.6 ) $ 406.8 $ 407.6 International ( 987.8 ) 25.8 102.2 Total $ ( 1,216.4 ) $ 432.6 $ 509.8 The provision for income taxes for the years ended December 31 were as follows: 2025 2024 2023 Current: Federal U.S. $ 33.3 $ 53.3 $ 67.4 Non-U.S. 35.0 36.1 28.9 State and local 4.9 11.7 11.8 Deferred: Federal U.S. ( 19.4 ) ( 3.4 ) ( 10.7 ) Non-U.S. ( 44.4 ) ( 18.1 ) ( 3.0 ) State and local ( 3.3 ) ( 1.6 ) ( 1.4 ) Income tax provision $ 6.1 $ 78.0 $ 93.0 Deferred Tax Assets and Liabilities All deferred tax assets and liabilities have been classified as noncurrent and are included in Other assets and Other long-term liabilities in the Consolidated and Combined Balance Sheets. Deferred income tax assets and liabilities as of December 31 were as follows: 2025 2024 Deferred tax assets: Operating lease liabilities $ 18.8 $ 18.6 Interest 17.9 — Inventories 14.0 13.4 Pension benefits 6.4 8.0 Stock-based compensation expense 12.3 11.2 Capitalized expenses 40.7 98.5 Tax credit and loss carryforwards 11.5 55.3 Accruals, prepayments, and other 15.8 14.5 Deferred income 31.5 13.1 Valuation allowances ( 24.2 ) ( 55.1 ) Total deferred tax assets 144.7 177.5 Deferred tax liabilities: Property, plant and equipment ( 18.1 ) ( 14.0 ) Operating lease right-of-use assets ( 17.5 ) ( 18.8 ) Insurance, including self-insurance ( 70.6 ) ( 91.0 ) Goodwill, other intangibles, and other ( 215.3 ) ( 273.1 ) Total deferred tax liabilities ( 321.5 ) ( 396.9 ) Net deferred tax assets/(liabilities) $ ( 176.8 ) $ ( 219.4 ) Reported As: Deferred tax assets $ 15.1 $ 11.9 Deferred tax liabilities ( 191.9 ) ( 231.3 ) Net deferred tax assets/(liabilities) $ ( 176.8 ) $ ( 219.4 ) 95 In accordance with the methodology described in Note 2, valuation allowances have been established for deferred tax assets to the extent they are not expected to be realized within the applicable carryforward periods. Ralliant’s valuation allowance decreased by $ 31.0 million during the current year, primarily due to deferred tax adjustments resulting from the separation from Fortive. As of December 31, 2025, Ralliant’s U.S. and non-U.S. net operating loss carryforwards totaled $ 97.7 million, of which $ 8.3 million was related to federal net operating loss carryforwards, $ 70.1 million was related to state net operating loss carryforwards, and $ 19.3 million was related to non-U.S. net operating loss carryforwards. Certain of these losses may be carried forward, while others expire at various dates ranging from 2026 through 2043. Utilization of certain loss carryforwards is subject to annual limitations, which may result in expiration prior to full utilization. As of December 31, 2025, Ralliant’s U.S. and non-U.S. tax credit carryforwards totaled $ 4.0 million, which was primarily related to U.S. tax credit carryforwards. Certain of these credits can be carried forward indefinitely and others can be carried forward to various dates from 2026 through 2035. As of December 31, 2025, the Company maintained a $ 0.7 million valuation allowance related to certain tax credit carryforwards. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, including, but not limited to, the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act (“TCJA”), modifications to the international tax framework, and the restoration of favorable tax treatment for certain business investments. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. As a result of the retroactive treatment for research and experimental expenditures enacted under OBBBA, the OBBBA is expected to provide significant cash tax benefits to the Company in 2025 through 2027. In addition, Ralliant was notified of Fortive’s intent to accelerate the amortization of previously capitalized research and experimental expenditures. Accordingly, Ralliant reduced its deferred tax assets by approximately $ 57.0 million in 2025. 96 Effective Income Tax Rate The effective income tax rate for the years ended December 31 varies from the U.S. statutory federal income tax rate as follows: 2025 Amount Percent US federal statutory tax rate $ ( 255.4 ) 21.0 % State and local income taxes, net of federal income tax effect (a) 1.3 ( 0.1 ) % Effect of changes in tax laws or rates enacted in the current period — — % Effect of cross-border tax laws Foreign-derived intangible income ( 16.9 ) 1.4 % Other 6.5 ( 0.5 ) % Tax credits ( 6.9 ) 0.6 % Changes in valuation allowances — — % Nontaxable or nondeductible items Goodwill impairment 74.5 ( 6.1 ) % Other 2.4 ( 0.2 ) % Changes in unrecognized tax benefits 7.2 ( 0.6 ) % Other adjustments ( 1.6 ) 0.1 % Foreign tax effects Germany Statutory tax rate difference between Germany and United States 68.2 ( 5.6 ) % Trade and local income taxes ( 193.5 ) 15.9 % Goodwill impairment 325.2 ( 26.7 ) % Changes in valuation allowances 16.8 ( 1.4 ) % Other ( 8.7 ) 0.7 % Other foreign jurisdictions ( 13.0 ) 1.0 % Effective income tax rate $ 6.1 ( 0.5 ) % (a) California, Maryland, Massachusetts, Oregon, and Illinois made up the majority (greater than 50 percent) of the tax effect in this category. 2024 2023 Statutory federal income tax rate 21.0 % 21.0 % Increase (decrease) in tax rate resulting from: State income taxes (net of federal income tax benefit) 1.8 % 1.6 % Foreign income taxed at different rates than U.S. statutory rate ( 4.7 ) % 0.2 % U.S. federal permanent differences related to the TCJA ( 6.3 ) % ( 6.0 ) % Effect of change in tax rates enacted in the current period — % ( 1.7 ) % Changes in valuation allowances 7.4 % 2.7 % Other ( 1.2 ) % 0.4 % Effective income tax rate 18.0 % 18.2 % Ralliant’s effective tax rate for 2025 differs from the U.S. federal statutory rate of 21% due primarily to non-deductible goodwill impairment, the enacted reduction in the German corporate tax rate on deferred tax balances, and the positive effects of the TCJA. Ralliant’s effective tax rate for 2024 differs from the U.S. federal statutory rate of 21% due primarily to the impacts of credits and deductions provided by law, including those associated with state income taxes and changes in its uncertain tax position reserves. 97 Ralliant’s effective tax rate for 2023 differs from the U.S. federal statutory rate of 21% due primarily to the positive and negative effects of the TCJA, U.S. federal permanent differences, and the impacts of credits and deductions provided by law, including those associated with state income taxes. Globally, the Company monitors legislative action and the Organization for Economic Co-operation and Development (“OECD”) initiatives related to global taxation. The impact of the OECD framework for a “Pillar Two” global minimum corporate income tax rate of 15% has been included within the provision for income taxes. In January 2026, the OECD issued additional administrative guidance related to Pillar Two. The Company is evaluating the impact of this guidance on its global minimum tax exposure. Based on current information, the Company does not expect a material impact on its consolidated and condensed financial statements. As part of the Separation, Ralliant entered into the Tax Matters Agreement with Fortive, which determines the treatment and responsibilities of both parties including joint returns and separate returns filings. Refer to Note 18 to the consolidated and combined financial statements included in this Annual Report for additional information on the Tax Matters Agreement. Cash Payments Ralliant made income tax payments of $ 74.2 million during the year. Prior to the Separation, the Company did not make any U.S. federal income tax payments, foreign tax payments, or payments for other “joint” tax returns for which the responsibility belongs to Fortive. Ralliant made income tax payments for “separate” tax returns for which the responsibility belongs to Ralliant per the Tax Matters Agreement. The cash payments, net of refunds, for the year ended December 31, 2025 was as follows: Federal taxes $ 8.5 State taxes 6.4 Foreign taxes: Hong Kong 15.9 China 10.5 Cayman Islands 9.6 Canada 8.9 Germany 7.1 Other foreign jurisdictions 7.3 Total cash taxes paid $ 74.2 Foreign tax payments of $ 15.9 million in Hong Kong and $ 9.6 million in the Cayman Islands were incurred in connection with internal tax transactions related to the Separation and represent one-time payments. Unrecognized Tax Benefits Ralliant recognizes tax benefits from uncertain tax positions only if, in its assessment, it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Judgment is required in evaluating tax positions and determining income tax provisions. The Company re-evaluates the technical merits of its tax positions and may recognize an uncertain tax benefit in certain circumstances, including when: (i) a tax audit is completed; (ii) applicable tax laws change, including a tax case ruling or legislative guidance; or (iii) the applicable statute of limitations expires. Ralliant recognizes potential accrued interest and penalties associated with unrecognized tax positions in Income tax expense within the Consolidated and Combined Statements of (Loss) Earnings. 98 As of December 31, 2025, gross unrecognized tax benefits were $ 23.9 million ($ 23.0 million total, including $ 2.7 million associated with interest, and net of the impact of $ 3.6 million of indirect tax benefits). The Company recognized approximately $ 2.7 million, $ 0.5 million, and $ 0.5 million, in potential interest associated with uncertain tax positions during 2025, 2024, and 2023, respectively. To the extent taxes are not assessed with respect to uncertain tax positions, substantially all amounts accrued (including interest and net of indirect offsets) will be reduced and reflected as a reduction of the overall income tax provision. Unrecognized tax benefits and associated accrued interest and penalties are included in the Company’s income tax provision. A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding amounts accrued for potential interest and penalties, is as follows: 2025 2024 2023 Unrecognized tax benefits, beginning of year $ 12.6 $ 16.4 $ 16.3 Additions based on tax positions related to the current year 6.7 0.6 0.9 Additions for tax positions of prior years 4.3 — — Reductions for tax positions of prior years ( 0.6 ) ( 6.9 ) ( 0.8 ) Effect of foreign currency translation 0.9 — — Acquisition-related adjustments — 2.5 — Unrecognized tax benefits, end of year $ 23.9 $ 12.6 $ 16.4 Repatriation and Unremitted Earnings As of December 31, 2025, the Company has a partial permanent reinvestment assertion on the undistributed earnings of its foreign subsidiaries outside of the United States and for which foreign deferred taxes have not been provided. No provisions for foreign remittance taxes have been made with respect to earnings that are planned to be permanently reinvested. The amount of foreign remittance taxes that may be applicable to such earnings is not readily determinable due to local legal restrictions that may apply to a portion of these earnings, potential changes in foreign tax laws during applicable restriction periods, and the various tax planning alternatives that could be available if such earnings were repatriated. NOTE 14. COMMITMENTS AND CONTINGENCIES Ralliant is, from time to time, subject to a variety of litigation and other proceedings incidental to Ralliant’s business, including lawsuits involving claims for damages arising out of the use of its products and services, claims relating to intellectual property matters, employment matters, commercial disputes, and personal injury as well as regulatory investigations or enforcement. Ralliant may also become subject to lawsuits as a result of past or future acquisitions or as a result of liabilities retained from, or representations, warranties, or indemnities provided in connection with divested businesses. Some of these lawsuits may include claims for punitive and consequential as well as compensatory damages. Based upon Ralliant’s experience, current information, and applicable law, Ralliant does not believe that any currently pending legal proceedings or claims will have a material adverse effect on Ralliant’s financial position, results of operations, or cash flows. Ralliant maintains property, cargo and transit, workers’ compensation, employers’, crime, fiduciary, cyber privacy and security, technology errors and omissions, product, general, and directors’ and officers’ liability insurance (and have acquired rights under similar policies in connection with certain acquisitions) that cover a portion of these claims. This insurance may at times be insufficient or unavailable to cover such losses. In addition, while Ralliant believes it is entitled to indemnification from third parties for some of these claims, these rights may also be insufficient or unavailable to cover such losses. Ralliant maintains third-party insurance policies up to certain limits to cover certain costs in excess of predetermined retained amounts. For most insured risks, Ralliant purchases outside insurance coverage for catastrophic losses (stop loss insurance) and reserves must be established and maintained with respect to amounts within the self-insured retention. 99 In accordance with accounting guidance, Ralliant records a liability in the consolidated and combined financial statements for loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss does not meet the known or probable level but is reasonably possible and a loss or range of loss can be reasonably estimated, the estimated loss or range of loss is disclosed. These reserves consist of specific reserves for individual claims and additional amounts for anticipated developments of these claims as well as for incurred but not yet reported claims. The specific reserves for individual known claims are quantified with the assistance of legal counsel, outside risk insurance professionals, and independent third-party actuaries where appropriate. In addition, independent third-party actuaries may assist in the determination of reserves for incurred but not yet reported claims through evaluation of Ralliant’s specific loss history, actual claims reported, and industry trends among statistical and other factors. Reserve estimates are adjusted as additional information regarding a claim becomes known. While Ralliant actively pursues financial recoveries from insurance providers, Ralliant does not recognize any recoveries until realized or until such time as a sustained pattern of collections is established related to historical matters of a similar nature and magnitude. If the risk insurance reserves established by Ralliant are inadequate, any adverse loss development in excess of the reserves would be recognized by Ralliant, which would adversely affect its Net (loss) earnings. In addition, Ralliant’s operations, products, and services are subject to environmental laws and regulations in various jurisdictions, which impose limitations on the discharge of pollutants into the environment and establish standards for the generation, use, treatment, storage, and disposal of hazardous and non-hazardous wastes. A number of Ralliant’s operations involve the handling, manufacturing, use, or sale of substances that are or could be classified as hazardous materials within the meaning of applicable laws. Ralliant must also comply with various health and safety regulations in both the United States and abroad in connection with its operations. Compliance with these laws and regulations has not had and, based on current information and the applicable laws and regulations currently in effect, is not expected to have a material effect on the Company’s capital expenditures, earnings, or competitive position, and the Company does not anticipate material capital expenditures for environmental control facilities. In addition to environmental compliance costs, from time to time, the Company incurs costs related to alleged damages associated with past or current waste disposal practices or other hazardous materials handling practices. For example, generators of hazardous substances found in disposal sites at which environmental problems are alleged to exist, as well as the current and former owners of those sites and certain other classes of persons, are subject to claims brought by federal and state regulatory agencies pursuant to statutory authority. The Company has received notification from the United States Environmental Protection Agency, and from state and non-U.S. environmental agencies, that conditions at certain sites where the Company and others previously disposed of hazardous wastes and/or of which the Company is or was a property owner require clean-up and other possible remedial action, including sites where it have been identified as a potentially responsible party under United States federal and state environmental laws. The Company has projects underway at a number of current and former facilities, in both the United States and abroad, to investigate and remediate environmental contamination resulting from past operations. Remediation activities generally relate to soil and/or groundwater contamination and may include pre-remedial activities such as fact-finding and investigation, risk assessment, feasibility study and/or design, as well as remediation actions such as contaminant removal, monitoring, and/or installation, operation, and maintenance of longer-term remediation systems. From time to time, the Company is also party to personal injury or other claims brought by private parties alleging injury due to the presence of, or exposure to, hazardous substances. 100 Ralliant has recorded a provision for environmental investigation and remediation and environmental-related claims with respect to sites Ralliant and its subsidiaries owned or formerly owned and third-party sites where Ralliant has been determined to be a potentially responsible party. Ralliant generally makes an assessment of the costs involved for its remediation efforts based on environmental studies, as well as its prior experience with similar sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties of Ralliant’s involvement in certain sites, uncertainties regarding the extent of the required cleanup, the availability of alternative cleanup methods, variations in the interpretation of applicable laws and regulations, the possibility of insurance recoveries with respect to certain sites, and the fact that imposition of joint and several liability with right of contribution is possible under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 and other environmental laws and regulations. If Ralliant determines that potential liability for a particular site or with respect to a personal injury claim is known or considered probable and reasonably estimable, Ralliant accrues the total estimated loss, including investigation and remediation costs, associated with the site or claim. As of December 31, 2025 and 2024, the Company had reserves of $ 12.1 million and $ 6.9 million, respectively, recorded within Accrued expenses and other current liabilities and Other long-term liabilities in the Consolidated and Combined Balance Sheets for environmental matters that are known or considered probable and reasonably estimable, which reflected the Company’s best estimate of the costs to be incurred with respect to such matters on an undiscounted basis. All reserves for environmental liabilities have been recorded without giving effect to any possible future third party recoveries. While Ralliant actively pursues insurance recoveries, as well as recoveries from other potentially responsible parties, Ralliant does not recognize any insurance recoveries for environmental liability claims until realized or until such time as a sustained pattern of collections is established related to historical matters of a similar nature and magnitude. As of December 31, 2025 and 2024, Ralliant had approximately $ 40.4 million and $ 28.2 million, respectively, of guarantees consisting primarily of outstanding standby letters of credit, bank guarantees, and performance and bid bonds. These guarantees have been provided in connection with certain arrangements with vendors, customers, financing counterparties, and governmental entities to secure the Company’s obligations and/or performance requirements related to specific transactions. Ralliant believes that if the obligations under these instruments were triggered, they would not have a material effect on the consolidated and combined financial statements. Ralliant has entered into agreements to purchase goods or services that are enforceable and legally binding on the Company and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancellable at any time without penalty. As of December 31, 2025, the aggregate amount of the Company’s purchase obligations totaled $ 263.1 million, of which $ 208.5 million are expected to be settled within one year of December 31, 2025. NOTE 15. STOCK-BASED COMPENSATION Prior to the Separation, Ralliant had no stock-based compensation plans; however, certain of its employees were eligible to participate in Fortive’s 2016 Stock Incentive Plan (“Fortive Stock Plan”), which provided grants of stock appreciation rights, restricted stock units (“RSUs”), and performance stock units (“PSUs”) (collectively, “Stock Awards”), stock options, or any other stock-based awards. All grants of Stock Awards and stock options prior to the Separation were made under the Fortive Stock Plan. In connection with the Separation, the Company established the Ralliant Corporation 2025 Stock Incentive Plan (the “Ralliant Stock Plan”). The outstanding equity awards of Fortive held by approximately 500 Ralliant employees were replaced with awards of Ralliant common stock under the Ralliant Stock Plan using a conversion factor using Fortive’s pre-spin close price and Ralliant’s the three-day volume-weighted average price as of July 2, 2025. The three-day volume-weighted average price was used to maintain the economic value before and after the Separation date using the ratio of the Ralliant common stock fair market value relative to the Fortive common stock fair market value prior to the Separation. Ralliant issued 3.8 million shares from the conversion of the Fortive equity awards. The terms of the equity awards, such as the award period, exercisability, and vesting schedule, as applicable, generally remained unchanged. As a result of this equity award conversion, the Company recorded incremental stock-based compensation expense of $ 22.4 million pretax and an income tax benefit of $ 4.1 million in the year ended December 31, 2025. 101 RSUs granted under the Ralliant Stock Plan provide for the issuance of common stock at no cost to the holder. RSUs granted to employees generally vest over four years , although certain other employees and non-employee directors may be awarded RSUs with different time-based vesting criteria. Prior to vesting, RSUs do not have dividend equivalent rights, do not have voting rights, and the shares underlying the RSUs are not considered issued or outstanding. No PSUs were granted under the Ralliant Stock Plan following the Separation. Stock options under the Ralliant Stock Plan generally vest pro rata over a four-year period and terminate 10 years from the grant date, though the specific terms of each grant are determined by the Compensation Committee of Ralliant’s Board of Directors (the “Board”). Ralliant’s executive officers and certain other employees may be awarded stock options with different vesting criteria and stock options granted to non-employee directors are fully vested as of the grant date. Exercise prices for stock options granted under the Ralliant Stock Plan were either equal to the closing price of Ralliant’s common stock on the NYSE on the date of grant or priced to maintain their economic value. Other than pursuant to any retirement benefits provided under Ralliant Stock Plan, the equity compensation awards granted by Ralliant generally vest only if the employee is employed by Ralliant (or in the case of directors, the director continues to serve on the Board) on the vesting date. To cover the exercise of stock options and vesting of RSUs and PSUs, Ralliant generally issues shares authorized but previously unissued, although it may instead issue treasury shares; provided, however, that either type of issuance would equally reduce the number of shares available under the Ralliant Stock Plan. Ralliant accounts for stock-based compensation by measuring the cost of employee services received in exchange for all equity awards granted based on the fair value of the award as of the grant date. Ralliant recognizes the compensation expense over the requisite service period (which is generally the vesting period but may be shorter than the vesting period, for example, if the employee becomes retirement eligible before the end of the vesting period). The expense associated with the employees of Ralliant who participated in the Fortive Stock Plan and in the Ralliant Stock Plan are recognized in the accompanying Consolidated and Combined Statements of (Loss) Earnings as a component of Selling, general and administrative expenses. The amount of stock-based compensation expense recognized during a period was based on the grant date fair value of the award and the portion of the awards that are ultimately expected to vest at Ralliant. The Company estimates pre-vesting forfeitures at the time of grant by analyzing historical data and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. Ultimately, the total expense recognized over the vesting period will equal the fair value of awards that actually vest. The amounts presented for the years ended December 31, 2025, 2024 and 2023 may not be indicative of Ralliant’s results had it been a separate standalone entity throughout the periods presented. For awards granted after the Separation under the Ralliant Stock Plan, the fair values of RSUs were calculated using the closing price of Ralliant’s common stock on the date of grant. The fair value of the RSUs is further adjusted for the impact of RSUs not having dividend rights prior to vesting. The fair value of the stock options granted is calculated using a Black-Scholes Merton (“Black-Scholes”) option pricing model. Ralliant recognizes compensation expense for these awards over the requisite service period (which is generally the vesting period but may be shorter than the vesting period, for example, if the employee becomes retirement eligible before the end of the vesting period), and estimates pre-vesting forfeitures at the time of grant by analyzing historical data, and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. Ultimately, the total expense recognized over the vesting period will equal the grant date fair value of awards that actually vest. 102 Stock-based Compensation Expense The following summarizes the components of the Company’s stock-based compensation expense for the years ended December 31: 2025 2024 2023 Stock Awards: Pretax compensation expense $ 33.4 $ 17.3 $ 16.4 Income tax benefit ( 6.0 ) ( 3.0 ) ( 3.0 ) Stock Award expense, net of income taxes 27.4 14.3 13.4 Stock options: Pretax compensation expense 22.8 7.2 8.6 Income tax benefit ( 3.8 ) ( 1.3 ) ( 1.5 ) Stock option expense, net of income taxes 19.0 5.9 7.1 Total stock-based compensation: Pretax compensation expense 56.2 24.5 25.0 Income tax benefit ( 9.8 ) ( 4.3 ) ( 4.5 ) Total stock-based compensation expense, net of income taxes $ 46.4 $ 20.2 $ 20.5 When Stock Awards vest or stock options are exercised by the employee, the Company derives a tax deduction measured by the excess of the market value on such date over the grant date price. Accordingly, the Company records the excess of the tax benefit related to the exercise of stock options and vesting of Stock Awards over the expense recorded for financial statement reporting purposes as a component of Income tax expense and as an operating cash inflow in the consolidated and combined financial statements. During the years ended December 31, 2025, 2024, and 2023, Ralliant realized an excess tax expense of $ 0.1 million and an excess tax benefit of $ 1.2 million and $ 2.5 million, respectively, related to stock options that were exercised and Stock Awards that vested. The following summarizes the unrecognized stock-based compensation expense for the Stock Awards and stock options as of December 31, 2025. This stock-based compensation expense is expected to be recognized over a weighted-average period of approximately two years , representing the remaining service period related to the awards. Future stock-based compensation amounts will be adjusted for any changes in estimated forfeitures. Stock Awards $ 9.1 Stock options 34.5 Total unrecognized compensation cost $ 43.6 Stock Awards The following summarizes information related to Stock Award activity under the Ralliant Stock Plan for the years ended December 31, 2025 and 2024: Number of Stock Awards Weighted Average Grant-Date Fair Value Unvested as of December 31, 2024 — $ — Awards converted from Fortive Stock Plan 1.2 $ 49.96 Granted 0.3 $ 43.80 Vested ( 0.1 ) $ 46.64 Unvested as of December 31, 2025 1.4 $ 48.77 103 Stock Options The following summarizes the assumptions used in the Black-Scholes model to value stock options granted after the Separation under the Ralliant Stock Plan during the year ended December 31, 2025: Risk-free interest rate 3.9 % – 4.0 % Volatility (a) 39.9 % – 40.3 % Dividend yield (b) 0.4 % Expected years until exercise 5.9 – 6.8 (a) Expected volatility is the measure of the amount by which the stock price has fluctuated or is expected to fluctuate. As the Company does not have sufficient historical data, peer volatility was used instead, which was calculated using an average of the expected term-matching lookback volatilities of peer companies as of the grant date. (b) The expected dividend yield is calculated using a $ 0.05 estimated quarterly dividend and the average stock price of Ralliant over its trading history as of the grant date, annualized and continuously compounded. The following summarizes stock option activity under the Ralliant Stock Plan (in millions, except price per share and numbers of years): Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding as of December 31, 2024 — $ — Awards converted from Fortive Stock Plan 2.6 $ 44.78 Granted 0.2 $ 46.91 Exercised ( 0.1 ) $ 33.06 Outstanding as of December 31, 2025 2.7 $ 44.94 5.9 $ 18.5 Vested and expected to vest as of December 31, 2025 (a) 2.7 $ 44.90 5.8 $ 18.3 Exercisable as of December 31, 2025 1.7 $ 42.74 4.5 $ 14.3 (a) The “expected to vest” options are the net unvested options that remain after applying the forfeiture rate assumption to total unvested options. The aggregate intrinsic values in the table above represent the total pretax intrinsic value (the difference between the closing stock price of Ralliant’s common stock on the last trading day of 2025 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2025. The amount of aggregate intrinsic value will change based on the price of the Company’s common stock. The following summarizes aggregate intrinsic value and cash receipts related to stock options that were exercised under the Ralliant Stock Plan for the year ended December 31, 2025: Aggregate intrinsic value of stock options exercised $ 1.1 Cash receipts from stock options exercised $ 2.1 104 NOTE 16. CAPITAL STOCK AND EARNINGS PER SHARE Common Stock Under Ralliant’s amended and restated certificate of incorporation, as of June 27, 2025, Ralliant’s authorized capital stock consists of 1,300 million common shares with par value $ 0.01 per share and 10.0 million preferred shares with par value $ 0.01 per share. On June 27, 2025, the 100 shares of Ralliant common stock held by Fortive were recapitalized into 112.7 million shares of Ralliant common stock held by Fortive. On June 28, 2025, Fortive distributed all of Ralliant’s issued and outstanding common stock to Fortive’s stockholders on a pro rata basis as discussed in Note 1. No preferred shares were issued or outstanding as of December 31, 2025. Each share of Ralliant common stock entitles the holder to one vote on all matters to be voted upon by common stockholders. The Board is authorized to issue shares of preferred stock in one or more series and has discretion to determine the rights, preferences, privileges, and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges, and liquidation preferences, of each series of preferred stock. The Board’s authority to issue preferred stock with voting rights or conversion rights that, if exercised, could adversely affect the voting power of the holders of common stock, could potentially discourage attempts by third parties to obtain control of Ralliant through certain types of takeover practices. Beginning in the third quarter of 2025, Ralliant announced its quarterly dividend paid on its common stock of $ 0.05 per share. Share Repurchase Authorization On June 28, 2025, the Board approved a share repurchase authorization of up to $ 200.0 million of the Company’s common stock. The timing and amount of share repurchases will be determined by the Company based on its evaluation of market conditions and other factors. The share repurchase authorization has no expiration date, does not obligate the Company to acquire any particular amount of shares, and may be suspended or discontinued at any time. The share repurchase authorization is consistent with the Company's capital allocation strategy to prioritize returning capital to shareholders. As of December 31, 2025, there have been no shares repurchased under the share repurchase authorization. Subsequent to December 31, 2025, the Company repurchased 1.2 million shares at an average price of $ 42.40 for a total cost of $ 50.0 million, leaving $ 150.0 million remaining under the share repurchase authorization. Net (Loss) Earnings per Common Share Basic net (loss) earnings per share (“EPS”) is calculated by dividing Net (loss) earnings attributable to common stockholders by the weighted average number of shares of common stock outstanding for the applicable period. Diluted EPS is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares under stock-based compensation plans under the treasury stock method, except where the inclusion of such shares would have an anti-dilutive impact. For the year ended December 31, 2025, the Company reported a Net loss; therefore, all potentially dilutive common shares were excluded from the computation of diluted net loss per share because their inclusion would have been anti-dilutive. Accordingly, basic and diluted net loss per share are the same. For years ended December 31, 2024 and 2023, prior to the Separation, the number of shares used in the calculation of basic and diluted earnings per share has been retrospectively adjusted to reflect the distributed shares established in the Separation. As the Company had no common stock or potentially dilutive securities outstanding prior to the Separation, basic and diluted earnings per share are identical for those periods. For the year ended December 31, 2025, the anti-dilutive options to purchase shares and anti-dilutive Stock Awards excluded from the diluted EPS calculation were 1.3 million shares. For the years ended December 31, 2024 and 2023, there were no anti-dilutive options. NOTE 17. SEGMENT INFORMATION Ralliant reports its results in two reportable segments that are also its two operating segments, consisting of Test and Measurement and Sensors and Safety Systems. Ralliant’s operating segments were determined based primarily on how the chief operating decision maker (“CODM”) views and evaluates the Company’s operations. Other factors including products and services, end markets served, and business cycle were also considered in determining the formation of operating segments. The Company's CODM is the chief executive officer. 105 The CODM uses operating profit at the segment level as the measure of profitability to assess performance and allocate resources, including merger and acquisition targets. The CODM also compares the actual results to expectations in assessing the performance of the segments. Operating profit represents total revenue less cost of sales and operating expenses. Operating expenses generally include Selling, general, and administrative expenses and Research and development expenses, which are the significant expense categories regularly provided to the CODM. Depreciation expense is recorded within both Cost of sales and Selling, general, and administrative expenses. Amortization expense is recorded within Selling, general, and administrative expenses. Goodwill impairment, when incurred, is also separately disclosed by segment. The identifiable assets by segment are those used in each segment’s operations. Inter-segment amounts are not significant and are eliminated in the consolidated and combined totals. Unallocated costs and other costs are not considered part of the Company’s evaluation of reportable segment operating performance. The Test and Measurement segment provides precision test and measurement instruments, systems, software, and services. Through its portfolio of industry leading solutions, including oscilloscopes, probes, source measuring units, semiconductor test systems, high-power bi-directional power supplies, and measurement analysis software packages, the Test and Measurement segment empowers scientists, engineers, and technicians to create and realize technological advances with greater efficiency, speed, and accuracy. The Sensors and Safety Systems segment provides leading power grid monitoring solutions, safety systems for mission critical defense and space applications, and sensing solutions for critical environments where uptime, precision, and reliability are essential. This includes advanced monitoring, protection, and diagnostic solutions for high-voltage electrical assets in power generation, transmission, and distribution. Sensors and Safety Systems’ energetic materials, ignition safety systems, and precision pyrotechnic devices are used in mission-critical applications such as satellite deployment, rocket propulsion initiation, aerial vehicle safety systems, and military defense systems. The Sensors and Safety Systems segment also provides premium sensing products encompassing liquid level, flow, and pressure sensors, motion sensors and components, and hygienic sensors. Segment results for the year ended December 31, 2025 were: Total Test and Measurement Sensors and Safety Systems Unallocated Corporate Costs and Other (a) Sales $ 2,068.8 $ 801.5 $ 1,267.3 $ — Cost of sales ( 1,028.5 ) ( 357.7 ) ( 670.8 ) — Operating expenses ( 781.6 ) ( 467.5 ) ( 255.4 ) ( 58.7 ) Goodwill impairment ( 1,441.7 ) ( 1,441.7 ) — — Operating (loss) profit ( 1,183.0 ) ( 1,465.4 ) 341.1 ( 58.7 ) Non-operating (expense) income, net Interest (expense) income, net ( 32.3 ) ( 0.3 ) 0.6 ( 32.6 ) Other non-operating expenses, net ( 1.1 ) ( 0.3 ) ( 0.2 ) ( 0.6 ) (Loss) earnings before income taxes $ ( 1,216.4 ) $ ( 1,466.0 ) $ 341.5 $ ( 91.9 ) Depreciation and amortization expenses $ ( 115.5 ) $ ( 101.6 ) $ ( 13.8 ) $ ( 0.1 ) Capital expenditures $ ( 39.2 ) $ ( 18.9 ) $ ( 15.8 ) $ ( 4.5 ) (a) Amounts primarily related to standalone public company costs and the stock-based compensation modification. 106 Segment results for the year ended December 31, 2024 were: Total Test and Measurement Sensors and Safety Systems Unallocated Corporate Costs and Other Sales $ 2,154.7 $ 937.5 $ 1,217.2 $ — Cost of sales ( 1,042.6 ) ( 383.3 ) ( 659.3 ) — Operating expenses ( 715.6 ) ( 494.5 ) ( 221.1 ) — Gain from sale of property (a) 63.1 63.1 — — Operating profit 459.6 122.8 336.8 — Non-operating expense, net Loss from divestiture ( 25.6 ) — ( 25.6 ) — Other non-operating expenses, net ( 1.4 ) ( 0.7 ) ( 0.7 ) — Earnings before income taxes $ 432.6 $ 122.1 $ 310.5 $ — Depreciation and amortization expenses $ ( 113.0 ) $ ( 98.4 ) $ ( 14.6 ) $ — Capital expenditures $ ( 34.3 ) $ ( 21.1 ) $ ( 13.2 ) $ — Segment results for the year ended December 31, 2023 were: Total Test and Measurement Sensors and Safety Systems Unallocated Corporate Costs and Other Sales $ 2,155.7 $ 941.3 $ 1,214.4 $ — Cost of sales ( 1,036.0 ) ( 366.3 ) ( 669.7 ) — Operating expenses ( 607.9 ) ( 383.9 ) ( 224.0 ) — Operating profit 511.8 191.1 320.7 — Non-operating expense, net Other non-operating expenses, net ( 2.0 ) ( 0.9 ) ( 1.1 ) — Earnings before income taxes $ 509.8 $ 190.2 $ 319.6 $ — Depreciation and amortization expenses $ ( 30.7 ) $ ( 15.1 ) $ ( 15.6 ) $ — Capital expenditures $ ( 29.2 ) $ ( 16.3 ) $ ( 12.9 ) $ — Segment Assets As of December 31, 2025 2024 Test and measurement $ 2,149.3 $ 3,447.7 Sensors and safety systems 1,306.4 1,256.7 Total segment assets 3,455.7 4,704.4 Other (a) 365.9 15.0 Total assets $ 3,821.6 $ 4,719.4 (a) Other represents corporate assets which consist primarily of cash and net deferred income tax assets. Operations in Geographic Areas As of December 31, 2025 2024 Property, plant and equipment, net: United States $ 154.7 $ 153.0 All other 59.5 47.2 Total $ 214.2 $ 200.2 107 NOTE 18. RELATED-PARTY TRANSACTIONS Related Party Agreements In connection with the Separation, on June 27, 2025, Fortive and Ralliant entered into a separation and distribution agreement with Fortive (the Separation and Distribution Agreement”) as well as various other related agreements (collectively the “Agreements”) that govern the Separation and the relationships between Fortive and Ralliant going forward, including the Employee Matters Agreement, the Tax Matters Agreement, the Transition Services Agreement, the Intellectual Property Matters Agreement, the FBS License Agreement, and the Fort Solutions License Agreement. Each agreement is defined below in its respective section. The Agreements provide for the allocation of assets, employees, liabilities, and obligations (including investments, property, employee benefits, and tax-related assets and liabilities) between Fortive and Ralliant attributable to periods prior to, at, and after the Separation and govern certain relationships between Fortive and Ralliant after the Separation. Separation and Distribution Agreement Ralliant entered into the Separation and Distribution Agreement with Fortive immediately prior to the distribution of its common stock to Fortive shareholders. The Separation and Distribution Agreement set forth the agreements with Fortive regarding the principal actions to be taken in connection with the Separation. It also sets forth other agreements that govern certain aspects of Ralliant’s relationship with Fortive following the Separation. Pursuant to the terms of the Separation and Distribution Agreement, the Company was subject to cash adjustment provisions, with payment of such adjustments to be made within five business days of the determination of the applicable final cash balance. Pursuant to the adjustment provisions, Ralliant’s aggregate cash balance at the time of the Separation, excluding any cash in certain restricted jurisdictions, was determined to have been greater than the reference cash balance of $ 150 million, and therefore, Ralliant was obligated to pay Fortive the excess. Subsequent to the Separation, Fortive notified Ralliant the aggregate cash balance exceeded such reference cash balance by approximately $ 41 million and Ralliant paid Fortive in accordance with the terms of the Separation and Distribution Agreement in the year ended December 31, 2025. The offset to the cash reimbursement was a reduction to Additional paid-in capital resulting from the cash settlement with the Former Parent. Employee Matters Agreement Ralliant and Fortive entered into an employee matters agreement that governs Ralliant’s and Fortive’s compensation and employee benefit obligations with respect to the employees and other service providers of each company, and generally will allocate liabilities and responsibilities relating to employment matters, employee compensation, and benefit plans and programs (the “Employee Matters Agreement”). The Employee Matters Agreement provided that each Fortive equity award held by Ralliant employees that was outstanding immediately prior to the completion of the distribution, would be assumed by Ralliant and converted into a Ralliant equity award denominated in shares of Ralliant common stock with a comparable value, based on an equity award adjustment ratio to be adopted by Fortive for purposes of making equitable adjustments to the Fortive equity awards held by Ralliant employees. The Employee Matters Agreement provided that, following the completion of the distribution, Ralliant employees generally will no longer participate in benefit plans sponsored or maintained by Fortive and will commence participation in Ralliant benefit plans, which are generally similar to the existing Fortive benefit plans. The Employee Matters Agreement also set forth the general principles relating to employee matters, including with respect to the assignment and transfer of employees, the assumption and retention of liabilities and related assets, workers’ compensation, payroll taxes, regulatory filings, leaves of absence, the provision of comparable benefits, employee service credit, the sharing of employee information, and the duplication or acceleration of benefits. 108 Tax Matters Agreement In connection with the Separation, Ralliant and Fortive entered into a tax matters agreement that governs the parties’ respective rights, responsibilities, and obligations with respect to taxes, including responsibility for tax liabilities, entitlement to tax refunds and other tax benefits, allocation of tax attributes, preparation and filing of tax returns, control of audits and other tax proceedings, and other matters relating to taxes (the “Tax Matters Agreement”). In general, and subject to certain exceptions (including with respect to certain transaction taxes triggered by the separation), under the Tax Matters Agreement, Ralliant will be responsible for any U.S. federal, state, local, or foreign taxes (and any related interest, penalties, or audit adjustments) imposed with respect to tax returns that include only Ralliant and/or any of Ralliant’s subsidiaries. Ralliant will generally be responsible for preparing and filing any such tax returns, and will generally have the authority to control tax contests with respect thereto. Refer to Note 13 to the consolidated and combined financial statements included in this Annual Report for information about federal, state, and foreign tax filings and examinations by domestic and international taxing authorities under the Tax Matters Agreement. In addition, the Tax Matters Agreement imposes certain restrictions on Ralliant and its subsidiaries designed to preserve the tax-free status of the distribution and certain related transactions, as well as the intended tax treatment of certain transactions entered into pursuant to the internal restructuring. Ralliant (and its subsidiaries) will be barred from taking any action, or failing to take any action, if such action or failure to act would adversely affect, or could reasonably be expected to adversely affect, the tax-free status or other intended tax treatment of these transactions. In addition, for the two-year period following the distribution, Ralliant (and its subsidiaries) will be subject to specific restrictions on its ability to enter into certain capital-raising, strategic, or other corporate transactions, including restrictions on: (i) mergers and other acquisition or sale transactions involving Ralliant’s stock, (ii) any corporate transaction which would cause the Company to undergo a 50% or greater change in its stock ownership (as determined for purposes of Section 355(e) of the Internal Revenue Code (“the Code”)), (iii) redemptions or repurchases of its stock, (iv) liquidation transactions, (v) discontinuing the active conduct of its trade or business, (vi) issuance or sale of its stock or other securities (including securities convertible into its stock, but excluding certain compensatory arrangements), (vii) sales of assets outside of the ordinary course of business, and (viii) amendments to its certificate of incorporation (or other organizational documents) or other actions affecting the voting rights of the Company’s common stock. The Tax Matters Agreement provides special rules that allocate tax liabilities in the event the distribution, together with certain related transactions, as well as any transaction entered into pursuant to the internal reorganization that is intended to be tax-free for applicable tax law purposes, is not tax-free (or otherwise fails to qualify for its intended tax treatment). In general, under the Tax Matters Agreement, each party is expected to be responsible for any taxes, whether imposed on Ralliant or Fortive, that arise from (1) the failure of the distribution, together with certain related transactions, to qualify for tax-free treatment under the Code or (2) the failure of certain related transactions to qualify for their intended tax treatment, in each case, to the extent that the failure to so qualify is attributable to post-distribution actions by such party or transactions with respect to such party’s stock, or to a breach of certain representations or covenants made by that party in the Tax Matters Agreement or in any documents relating to the IRS ruling or opinions of tax advisors obtained in connection with the distribution, certain related transactions or the internal restructuring. Pursuant to the terms of the Tax Matters Agreement, Ralliant is required to reimburse Fortive or pay taxing authorities directly for an amount contractually agreed with Fortive of approximately $ 51.0 million. Of the approximately $ 51.0 million of tax transaction costs, $ 50.0 million was paid during 2025 and $ 1.1 million was accrued as a payable due to Fortive as of December 31, 2025. The total tax transaction costs of $ 51.0 million were recognized in the third quarter and were recorded as an offset to additional paid-in capital as the items represent a settlement with the Former Parent in accordance with the Tax Matters Agreement. Transition Services Agreement Ralliant and Fortive have entered into a transition services agreement that became effective upon the distribution, pursuant to which Fortive and its subsidiaries and Ralliant and its subsidiaries provide to each other, for an interim, transitional period, various services in order to help ensure an orderly transition following the separation and the distribution (the “Transition Services Agreement”). The cost of these services is negotiated between Ralliant and Fortive as set forth in the Transition Services Agreement. 109 The Transition Services Agreement terminates on the expiration of the term of the last service provided under it, unless earlier terminated by either party under certain circumstances, including, but not limited to, in the event of any uncured material breach by the other party or its applicable affiliates. If no term period is provided for a specified service, then such service is to terminate on the second anniversary of the effective date of the Transition Services Agreement. The recipient of a particular service generally can terminate that service prior to the scheduled expiration date, subject to a minimum notice period equal to 30 days. Ralliant does not expect the net costs associated with the Transition Services Agreement to be materially different than the historical costs that have been allocated to Ralliant related to these same services prior to the Separation. Per the Transition Services Agreement, Fortive and the Company provide to each other certain specified services on a temporary basis, including various information technology, financial, and administrative services. The cost of these services are negotiated between the Company and Fortive as set forth in the Transition Services Agreement and were immaterial during the year ended December 31, 2025. Intellectual Property Matters Agreement Ralliant and Fortive entered into an intellectual property matters agreement pursuant to which Fortive granted to Ralliant a non-exclusive, royalty-free, fully paid-up, worldwide, irrevocable, sublicensable (subject to the restrictions below) license to use certain intellectual property rights retained by Fortive (the “Intellectual Property Matters Agreement”). Ralliant will be able to sublicense its rights in connection with activities relating to the Company and its affiliates’ business but not for independent use by third parties. Ralliant will also grant back to Fortive a non-exclusive, royalty-free, fully paid-up, worldwide, irrevocable, sublicensable (subject to the restrictions below) license to continue to use certain intellectual property rights owned by or transferred to Ralliant. Fortive will be able to sublicense its rights in connection with activities relating to Fortive’s and its affiliates’ retained business but not for independent use by third parties. This license-back will permit Fortive to continue to use certain of Ralliant’s intellectual property rights in the conduct of its remaining businesses. Ralliant believes that the license-back will have little impact on its businesses because Fortive’s use of intellectual property rights is generally limited to products and services that are not part of the Company’s businesses. The Intellectual Property Matters Agreement is intended to provide freedom to operate in the event that any of Fortive’s retained trade secrets (excluding Fortive Business System (“FBS”), copyrights, or patented technology is used in any of Ralliant’s businesses, and, as such, applies to all portions of Ralliant’s businesses. However, management believes there may be relatively little use of such retained trade secrets, copyrights, or patented technology in Ralliant’s businesses, and as a result, they do not believe that the Intellectual Property Matters Agreement has a material impact on any of Ralliant’s businesses. FBS License Agreement Ralliant and Fortive entered into a license agreement (the ”FBS License Agreement”) pursuant to which Fortive granted Ralliant a non-exclusive, royalty-free, fully paid-up, worldwide, sublicensable (subject to the restrictions below) license to use the FBS solely in support of Ralliant’s business. Ralliant will be able to sublicense such license to direct and indirect, wholly-owned subsidiaries (but only as long as such entities remain direct and indirect, wholly-owned subsidiaries), and to third parties to support its own business. In addition, in the unlikely event that either Ralliant or Fortive patents any invention claiming an improvement on FBS within the first two years of the term of the FBS License Agreement, the party who acquires that patent will license the other party under the same terms described above, but with no obligation to disclose any such improvements. Ralliant anticipates that FBS, which was rebranded as Ralliant Business System (“RBS”) as used by Ralliant following the distribution, will be used by its various businesses and functions to continuously improve performance. 110 Fort Solutions License Agreement Ralliant and Fortive entered into a license agreement pursuant to which Fortive granted Ralliant a non-exclusive, royalty-free, fully paid-up, worldwide, license to use certain software modules, algorithms, processes, tools, feedback, and reports developed through the use of Fortive’s Fort Technology Platform (“Solutions”) used in Ralliant’s business as of the distribution date, solely in support of Ralliant’s business (the “Fort Solutions License Agreement”). Ralliant will be able to sublicense such license to direct and indirect, wholly-owned subsidiaries (but only as long as such entities remain direct and indirect, wholly-owned subsidiaries), and to third parties to support its own business. To the extent the Company provides Fortive with any feedback with respect to the Solutions the Company is licensed, Ralliant will grant Fortive a non-exclusive, royalty-free, fully paid-up, worldwide, license to use such feedback in Fortive’s own business. In addition, in the unlikely event that either Ralliant or Fortive patents any invention claiming an improvement on the Solutions that are licensed to the Company within the first two years of the term of the Fort Solutions License Agreement, the party who acquires that patent will license the other party under the same terms described above, but with no obligation to disclose any such improvements. Allocations of Expenses Prior to the Separation, Ralliant operated as part of Fortive and not as a standalone company. Certain shared costs were allocated to Ralliant by Fortive in the periods prior to the Separation, and were reflected as expenses in the accompanying consolidated and combined financial statements. Management considered the allocation methodologies used to be reasonable and appropriate reflections of the related expenses attributable to Ralliant for purposes of the carved-out financial statements; however, the expenses reflected in the accompanying consolidated and combined financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if Ralliant had operated as a separate standalone entity or the expenses that will be incurred in the future by Ralliant. Corporate Expenses Certain corporate overhead and other shared expenses incurred by Fortive and its subsidiaries have been allocated to Ralliant and are reflected in the accompanying Consolidated and Combined Statements of (Loss) Earnings. These amounts include, but are not limited to, items such as general management and executive oversight, costs to support Fortive information technology infrastructure, facilities, compliance, human resources, marketing, and legal functions and financial management and transaction processing, including public company reporting, consolidated tax filings and tax planning, Fortive benefit plan administration, risk management and consolidated treasury services, certain employee benefits and incentives, and stock-based compensation administration. These costs were allocated using a methodology that management believes is reasonable for the item being allocated. Allocation methodologies include Ralliant’s relative share of revenues, headcount, or functional spend as a percentage of the total. Insurance Programs Administered by Former Parent In addition to the corporate allocations noted above, Ralliant was allocated expenses related to certain insurance programs Fortive administered on behalf of Ralliant, including automobile liability, workers’ compensation, general liability, product liability, director’s and officer’s liability, cargo, and property insurance. These amounts were allocated using various methodologies, as described below. Included within the insurance cost allocation were amounts related to programs for which Fortive was self-insured up to a certain amount. For the self-insured component, costs were allocated to Ralliant based on incurred claims of Ralliant. Fortive has premium-based policies that cover amounts in excess of the self-insured retentions. Ralliant was allocated a portion of the total insurance cost incurred by Fortive based on its pro-rata portion of Fortive’s total underlying exposure base. An estimated liability relating to Ralliant’s known and incurred but not reported claims has been allocated to Ralliant and reflected in the accompanying Consolidated and Combined Balance Sheets. Medical Insurance Programs Administered by Former Parent In addition to the corporate allocations noted above, Ralliant was allocated expenses related to the medical insurance programs administered by Fortive on behalf of Ralliant. These amounts were allocated using actual medical claims incurred during the period for the employees attributable to Ralliant. 111 Deferred Compensation Program Administered by Former Parent Certain employees of Ralliant participated in Fortive’s nonqualified deferred compensation programs, which permitted officers, directors, and certain management employees to defer a portion of their compensation, on a pretax basis, until their termination of employment. Participants may choose among alternative earnings rates for the amounts they defer, which are primarily based on investment options within Fortive’s 401(k) program (except that the earnings rates for amounts contributed unilaterally by Ralliant are entirely based on changes in the value of Fortive’s common stock). All amounts deferred under this plan were unfunded, unsecured obligations of Ralliant. The amounts of related party expenses allocated to Ralliant from Fortive and its non-Ralliant subsidiaries for the years ended December 31 were as follows: 2025 2024 2023 Allocated corporate expenses $ 20.3 $ 40.8 $ 37.9 Directly attributable expenses: Insurance programs expenses 3.6 6.5 5.7 Medical insurance programs expenses 30.5 62.5 57.0 Deferred compensation program expenses 1.3 1.2 0.9 Total related party expenses $ 55.7 $ 111.0 $ 101.5 Revenue and Other Transactions Entered into in the Ordinary Course of Business Prior to the Separation, Ralliant operated as part of Fortive and not as a standalone company and certain of Ralliant’s revenue arrangements related to contracts entered into in the ordinary course of business with Fortive and its affiliates. Following the Separation, Ralliant continues to enter into revenue arrangements in the ordinary course of business with Fortive and its affiliates, although certain agreements were entered into or terminated as a result of the Separation. Ralliant’s sales to and purchases from Fortive were not material during the years ended December 31, 2025, 2024, and 2023. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.